Advantages of Double Declining Balance Method




The double-declining-balance method is an accelerated, or decreasing-charge, depreciation method. Compared to the straight-line depreciation method of allocating an asset's purchase cost evenly over the life of the asset, the double-declining-balance method appropriates more depreciation expenses to the early years of an asset's life and less to later years. Such a cost allocation may better match the benefit certain assets provide with the rate of their value decline over time. The double-declining-balance method is also used for tax considerations in the early years and balancing asset maintenance costs in later years.

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Accounting for Management - Accounting theme from Business Law.