Which depreciation method ignores residual value when computing the depreciable base of an asset?
A)sum-of-the-years'-digits method
B)double-declining-balance method
C)composite method
D)group method

Question

Quizplus · Accepted Answer

The double-declining-balance method is an accelerated depreciation method that ignores the residual value of an asset when calculating its depreciable base. It applies a depreciation rate that is double the straight-line rate to the asset’s net book value at the beginning of each period. This results in higher depreciation expenses in the earlier years of the asset’s life, which reflects the asset’s higher wear and tear during those years.

Which Depreciation Method Ignores Residual Value When Computing the Depreciable