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 want to maximize their net income during the earlier years of the assets life.
C)They want to maximize the asset's book value in the earlier years of the asset's life.
D)They want to maximize the total depreciation expense over the life of the asset.

Question

Quizplus · Accepted Answer

The double-declining-balance depreciation method results in more depreciation in the earlier years of an asset's life which will best fit the robotic equipment scenario.

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