The depreciation method in which the number of years of the useful life of an asset is allocated in a reverse order is

Answer Details

The depreciation method that allocates the number of years of useful life of an asset in reverse order is called the "sum of the years' digits" method. In this method, the total number of years of an asset's useful life is determined, and then the digits of each year are added together to get a sum. For example, if an asset has a useful life of 5 years, the digits would be 5, 4, 3, 2, and 1, and the sum of the digits would be 15 (5+4+3+2+1). Each year, the asset's depreciation expense is calculated by taking the number of years remaining in the useful life, dividing it by the sum of the digits, and multiplying it by the asset's cost minus its salvage value. The sum of the years' digits method results in higher depreciation expenses in the earlier years of an asset's life and lower expenses in the later years. This is because more of the asset's useful life is assumed to be used up in the earlier years.