A method of charging depreciation at a fixed percentage of the net book value is
Question 1 Report
A method of charging depreciation at a fixed percentage of the net book value is
Answer Details
The method of charging depreciation at a fixed percentage of the net book value is called the reducing balance method. This method assumes that the asset will lose value more rapidly in the early years of its life and less rapidly in later years. It involves calculating depreciation as a fixed percentage of the asset's net book value, which is the original cost of the asset less its accumulated depreciation. This means that the depreciation charge will decrease over time, as the net book value of the asset reduces. This method is commonly used for assets that have a high rate of obsolescence or wear and tear, such as machinery or vehicles.
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