The book value of an operational asset initially declines less rapidly under the straight-line method than under the declining-balance method.

Question

Quizplus · Accepted Answer

The straight-line method evenly spreads the depreciation over the asset's useful life, whereas the declining-balance method accelerates depreciation in the earlier years. Therefore, the book value declines more rapidly under the declining-balance method in the early years, and less rapidly in the later years.

The Book Value of an Operational Asset Initially Declines Less