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The both are accelerated depreciation methods.
Now it depends upon the objective of the company. For example, the objective is to reduce the reported profit of a business in near term. If you want to do it aggressively, sum of years’ digits method is good otherwise reducing balance method is the appropriate choice.
Also see the reporting and regulatory requirements of the respective territory before choosing a depreciation method.
Agreed with Mr. Shahbaz answer
I agree with the answer given by Shahbaz Hayder Chief Financial Officer. His answer is very CORRECT.
true, Straight Line depreciation is easy to account and calculate than reduced balance or written-down value method. but if you consider Straight line some day the value of asset will be 'Zero' . In case of writtendown Value method asset value is unlimited, unless asset is sold or written off.
Option B is correct because it is not good practice to neglect salvage value of an asset. Depreciation methods differs as per nature of an asset, We can not implement same method on all.
B >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
B. False
It's a mistake to exclude scrap value at the end of use and the difficulty in determining the useful life of the asset
Option " 2 " False
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Option B. False is the correct answer
false, as described by Mr. Georgi Assi
