Depreciation Methods:

Learning Objectives:

1. What are the various methods for depreciation?

Fixed assets differ from each other in their nature so widely that the same depreciation methods cannot be applied to each. The following methods have therefore been evolved for depreciating various assets:

1. Fixed installment or Straight line or Original cost method.

2. Diminishing Balance Method or Written down value method or Reducing Installment method.

3. Annuity Method.

4. Depreciation fund method or Sinking fund amortization fund method.

5. Insurance policy method.

6. Revaluation method.

7. Sum of the year’s digits method (SYD).

8. Double declining balance method.

9. Depletion method.

10. The basis of use system.

You may also be interested in other articles from “accounting for depreciation” chapter:

1. Definition and Explanation of Depreciation
2. Causes of Depreciation
3. Need for Depreciation
4. Depreciation, Depletion and Amortization
5. Difference Between Depreciation and Fluctuation
6. Basic Factors of Determination of Depreciation
7. Depreciation Methods / Methods for Providing Depreciation
8. Fixed Installment Method / Straight Line Method / Original Cost Method
9. Diminishing balance/written Down Value/Reducing Installment Method of Depreciation
10. Annuity Method of Depreciation
11. Depreciation Fund Method or Sinking Fund Method
12. Insurance Policy Method of Depreciation
13. Revaluation Method of Depreciation
14. Sum of the Years’ Digits Method of Depreciation
15. Double Declining Balance Method of Depreciation
16. Depletion Method of Depreciation
17. Basis of Use System of Depreciation
18. Depreciation Of Various Assets
19. Depreciation Accounting – General Questions and Answers