The reducing-balance method is an alternative method to the units-of-output method, and may be a better reflection of the actual usage of most assets, such as plant and equipment.

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The reducing-balance method allows for greater depreciation in the earlier years of an asset's use, when it is likely to be used more heavily, and lesser depreciation in later years when it may be used less frequently. This is often a more accurate reflection of an asset's depreciation than the units-of-output method, which assumes a linear rate of usage.

The Reducing-Balance Method Is an Alternative Method to the Units-Of-Output