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In what circumstance is the reducing balance method more appropriate than straight line method?

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Question added by alex abgelie
Date Posted: 2016/04/08
Frank Mwansa
by Frank Mwansa , ACCOUNTING LECTURER , FREELANCER

Thanks for invitation

The reducing balancing method assumes that future benefits associated with the asset decline more in the earlier years of the asset's life than in the later years.

So the method is more suitable to use when it is assumed that the asset will be used more in the earlier years than in the later years. So depreciation will be charged more in earlier years and less in later years when the asset is used less.

the reducing method assumes that future benefits associated with the asset decline more in the year ealier of the asset life than in late years

Deleted user
by Deleted user

GENERALLY WDV METHOD ACCEPTED BY TAX AUTHORITIES BUT AS PER COMPANY MAINTENANC SLM METHOD IS ALWAYS GOOD EASILY WRITTEN OFF THE ASSETS AND SHOW PROFIT AND LOSS IN THE BOOKS OF ACCOUNTS

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