Question

Which is better, the straight-line method of depreciation or the written down value method of depreciation?

Answer 1

The straight-line method of depreciation (SLM) is used for fixed assets or resources whose utility is similarly spread across the long periods of its valuable life. Written down value method of depreciation (WDV) is ideally applied for fixed resources that have a more serious level of wear and tear or outdated nature, that is, whose advantages are higher at the beginning of the life of the asset than in the later years.

Also see:

• MCQs on Depreciation
• What Is Depreciation?