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प्रश्न
State the advantages of written down value method of depreciation.
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उत्तर
Following are the advantages of the written down value method.
- Equal charge against income:
In the initial years depreciation is high and repair charges are low. When the asset becomes older, the amount of depreciation charged is less but repair charges are high. Hence, the total burden on profit in respect of depreciation and repairs put together remains almost similar year after year. - Logical method:
In the earlier years, when the asset is more productive, high depreciation is charged. In the later years when the asset becomes less productive, the depreciation charge is less.
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संबंधित प्रश्न
Complete the following sentence:
Under ______ system, the amount of depreciation changes every year.
Complete the following sentence:
______ is the value which an asset realises at the end of its useful life.
Which method shall be efficient, if repairs and maintenance cost of an asset increases as it grows older.
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