Under what conditions would a company most likely adopt the double declining-balance method for financial reporting?
A)They have high technology,robotic equipment in their plant that becomes obsolete quickly and declines in utility to the company more rapidly in the early years of the assets' lives.
B)They have a fleet of trucks where repair costs increase annually as the fleet ages.
C)They expect the asset to lose its value more rapidly in the first few years of its life.
D)Both a)and c)above.

Question

Quizplus · Accepted Answer

The double declining-balance method is best suited for assets that quickly lose their value in the early years of their life. This is often the case with high-tech equipment or machinery that becomes quickly obsolete or wears out faster in the first few years of its use. Therefore, option A is correct. Additionally, option C is also correct because the double declining-balance method matches the depreciation expense with the asset's usage, which leads to a higher depreciation expense in the early years of the asset's life.

Under What Conditions Would a Company Most Likely Adopt the Double