Depreciation: Declining Balance Method - www.atcmathprof.com

[Raajacharya21]

Hope that helps :D

[Raajacharya21]

For Straight-Line Method, Your depreciation is CONSTANT every Accounting Period. Your PFD will increase every year because you will have to add the depreciated amount into PFD. It is calculated by: (COST-SCRAP VALUE) DIVIDED BY USEFUL LIFE or DEPRECIATION RATE (%) X (COST- SCRAP VALUE)

[Raajacharya21]

With declining method, your depreciation is lessened every accounting period because Depreciation= (depreciation % e.g. 10%) x (Cost of asset-Provision For Depreciation) This way, your depreciation gets smaller and your PFD increases every accounting period because your depreciation amount for that accounting period will be added to the PFD.

[SNdoubleOPY9]

What is the diffrence between the declining method and the straight line method still finding it hard to seperate the two can you please help me