Under what conditions would a company most likely adopt the double-declining-balance method for financial reporting?
A) They expect the asset to lose its value more rapidly in the first few years of its life.
B) They have high technology, robotic equipment in their plant that have a long usable life.
C) They expect the asset to lose its value in a huge portion after some years of its use.
D) They have a fleet of trucks where repair costs increase annually as the fleet ages.

Question

Quizplus · Accepted Answer

The double-declining-balance method accelerates depreciation in earlier years, which is most appropriate when an asset is expected to lose its value more rapidly in the first few years of its life.

Under What Conditions Would a Company Most Likely Adopt the Double-Declining-Balance