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double declining-balance is one of two declining balance methods.The method is so named because the periodic depreciation is sed on a dechining book value of the asset.With this method, companies compute NOL BLE DECLINING BALANCE-METHOD: al depreciation expense by multiplying the book value at the beginning of the by the straight-line depreciation rate multiplied by two.The double Alining-balance method produces a decreasing annual depreciation expense over asset's useful life.This is so Ncause the balance in accumulated depreciation at the beginning of the asset's Isful life is zero.Unlike the other depreciation methods, the declining-balance method does not use depreciable cost.The depreciation rate dvlines cach year.
double declining-balance is one of two declining balance methods. The double Alining-balance method produces a decreasing annual depreciation expense over asset's useful life. The method is so named because the periodic depreciation is sed on a dechinıng book value of the asset. With this method, companies compute NOL BLE DECLINING BALANCE-METHOD: al depreciation expense by multiplying the book value at the beginning of the by the straight-line depreciation rate multiplied by two. The depreciation rate dvlines cach year. mains constant from year to year, but the book value to which the rate is applied A the beginning of the first year, book value is the cost of the asset. This is so Ncause the balance in accumulated depreciation at the beginning of the asset's Isful life is zero. In subsequent years, book value is the difference between cost nd accumulated depreciation to date. Unlike the other depreciation methods, the declining-balance method does not use depreciable cost. That is, it ignores salvage value in determining the amount to which the declining-balance rate is applied. Salvage value, however, does limit the total depreciation that can be taken. Depreciation stops when the asset's book value equals expected salvage value. A common declining-balance method rate is double the straight-line method rate, The method is often called the double-declining method. Another declining-balance method is the sum-of-years (not to be discussed) digits
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