Depreciation computed under double-declining-balance will decrease each year because:

Question

Quizplus · Accepted Answer

Double-declining-balance depreciation method uses a constant rate applied to the decreasing book value of the asset. The book value decreases each year because a fixed percentage of depreciation is being applied to the initial cost of the asset each year. Therefore, the book value used in computing the depreciation expense each year decreases, leading to a decrease in the depreciation expense.

Depreciation Computed Under Double-Declining-Balance Will Decrease Each Year Because