When calculating depreciation on the reducing balance basis, residual value is always deducted from cost when calculating the annual depreciation expense.

Name: When calculating depreciation on the reducing balance basis, residual value is always deducted from cost when calculating the annual depreciation expense.
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Question

Quizplus · Accepted Answer

In the reducing balance method, depreciation is calculated on the book value of the asset at the beginning of the year, not by deducting the residual value from the cost.

When Calculating Depreciation on the Reducing Balance Basis, Residual Value