Describe Written down Value method

Question

Briefly describe Written down Value (or Reducing Balance) method to compute depreciation?

Answer 1

In Written down Value Method , the rate of depreciation is determined. This is completed by deducting the amount of depreciation charged ere from the balance of cost of asset (or Cost of Asset Estimated Scrap Value). In easy terms, in the initial year the amount of depreciation charged is high and it slowly starts declining throughout the following years.