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Double declining balance method is an accelerated depreciation method that counts twice as much as of the assets book value as the life of the asset progressess. This method charges depreciation at higher rate in the earlier years of an asset. The amount of depreciation reduces as the life of the asset progresses.
This method is applicable with assets that lose value quickly at the beginning of its useful life since larger depreciation expenses is charge neart the beginning of an asse's life and smaller depreciation expenses is charage as the life of the asset progresses.
Declining balance refers to the asset's book value or carrying value at the beginning of the accounting period. Book value is an asset's cost minus its accumulated depreciation.
My answer will coincide with some of the other presentations below.A depreciation method that records large depreciation expenses in the early years of an asset's life and reduceddepreciation expenses in the later years of an asset's life. The reason for the acceleration of depreciation is designed to reduce taxable income and tax payments so that extra cash will be available for reinvestment sooner than later. According to this method,depreciation is calculated by multiplying twice the straight-line depreciation rate by the asset's book value each year.
The double declining balance method of depreciation, also known as the 200% declining balance method of depreciation, is a common form of accelerated depreciation. Accelerated depreciation means that an asset will be depreciated faster than would be the case under the straight line method. Although the depreciation will be faster, the total depreciation over the life of the asset will not be greater than the total depreciation using the straight line method. This means that the double declining balance method will result in greater depreciation expense in each of the early years of an asset's life and smaller depreciation expense in the later years of an asset's life as compared to straight line depreciation.
This is a method of calculating depreciation using 200pc on cost price as period depreciation.
it is like written down value mathod but rate of depereciation is double for example: assets value $30000 @20% depreciation in first year is $6000, second year assets value $30000 less $6000 = $24000 @20% depreciation $4800
The declination method is based on a stable rate at the net book value of the asset and generates an annual decrease depreciation expense during the use of the asset. In this sense, the decrease in depreciation is closely related to the decrease in the net book value of the asset during the subsequent period. In order to identify the expense of depreciation using the double declination method, accountants follow the following steps: Calculation of the constant rate by dividing 100% on the probable number of years during which the asset will be used. In our case, the rate is equal to 100% / 4 = 25%. Calculation of the balance rate of double declination by multiplying the constant rate by 2. Thus, one will have 25% x2 = 50%. Adoption of the double declination balance rate to the book value of the property at the beginning of any term.
Annually Depreciation of an asset calculated is not more than a percentage. So is Every year . And there is a market value index on ageing .
Agree with answers given so far
Under the double declining balance method, double means twice or 200% of the straight line depreciation rate. Declining balance refers to the asset's book value or carrying value at the beginning of the accounting period. Book value is an asset's cost minus its accumulated depreciation.
The double declining balance method of depreciation, also known as the 200% declining balance method of depreciation, is a common form of accelerated depreciation. Accelerated depreciation means that an asset will be depreciated faster than would be the case under the straight line method. Although the depreciation will be faster, the total depreciation over the life of the asset will not be greater than the total depreciation using the straight line method. This means that the double declining balance method will result in greater depreciation expense in each of the early years of an asset's life and smaller depreciation expense in the later years of an asset's life as compared to straight line depreciation.Under the double declining balance method, double means twice or 200% of the straight line depreciation rate. Declining balance refers to the asset's book value or carrying value at the beginning of the accounting period. Book value is an asset's cost minus its accumulated depreciation. The asset's book value will decrease when the contra asset account Accumulated Depreciation is credited with the depreciation expense of the accounting period.
