The depreciation method that allocates higher value to the use of an asset in its earlier years is
Question 1 Report
The depreciation method that allocates higher value to the use of an asset in its earlier years is
Answer Details
The depreciation method that allocates higher value to the use of an asset in its earlier years is the diminishing balance method. This method allocates a higher amount of depreciation expense in the earlier years of an asset's life, and a lower amount of depreciation expense in the later years of its life. This is because it assumes that an asset is more productive and efficient in its early years, and less productive and efficient as it ages. Therefore, it allocates a higher percentage of the asset's cost as depreciation in the early years, and gradually decreases the percentage in later years. This method results in a faster write-off of the asset's cost, and a lower carrying value of the asset on the balance sheet.
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