Question

Which of the following best defines the Written Down Value (WDV) Method?

Options

• Depreciation charged equally every year on the original cost of the asset

• Depreciation charged every year on the asset’s current book value

• Depreciation charged once for the entire life of the asset

• Depreciation charged based on estimated life only

Answer 1

Depreciation charged every year on the asset’s current book value

Explanation:

In the WDV Method, depreciation is calculated on the current book value, so the amount of depreciation decreases each year.