Declining balance depreciation

Declining balance depreciation,

Definition of Declining balance depreciation:

  1. Method of computing depreciation in which the written down or book value (purchase price - accumulated depreciation) of a capital asset is reduced by a fixed percentage rate. This method results in larger depreciation amounts in the earlier years of an assets useful life and progressively lower amounts in later years, and is employed where the usage of an asset remains generally uniform despite the assets age. Formula: 1- (Residual value รท Cost)^1/N where N is the number of years in the assets estimated useful life. Also called diminishing balance depreciation, and reducing balance depreciation. See also straight line depreciation.

Meaning of Declining balance depreciation & Declining balance depreciation Definition