Unformatted text preview: A company can select the method to use when registering depreciation. The most popular method is the double declining balance method where the depreciation base is net book value and it starts declining at a fast rate. There is also the straight line method where the expense is recognized evenly during the asset’s useful life span at a slower rate if compared to the double declining balance method. (Easton et al, 2010). Most companies’ selection of method depends on whether it is for financial reporting purposes (SL method) or for tax returns using the double declining balance method (Easton et al, 2010). References: Easton, P. D., Halsey, R. F., McAnally, M. L., Hartgraves, A. & Morse, W. J., (2010). Financial & Managerial Accounting for MBAs. Canada: Cambridge Business Publishers, LLC....
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This note was uploaded on 04/06/2012 for the course FINANCE 410 taught by Professor N/a during the Spring '09 term at AIU Online.
- Spring '09