01-25-2011, 11:25 PM
In my view straightline method is more logical since using such method demonstrates to the users of accounts that in how much definitive time the value of asset will be consumed in operations. This may provide an impetus for resreving funds in order to finance the due replacements and BMR etc with a better vision. However, this opinion can look childish and theoratical for many reasons in the detail of which I would not go.
Despite my above views, I always advise people to follow reducing balance method. This is because people at large don't have good computerized systems which can ensure that depreciation is not charged on fully depreciated assets; which is always a threat in case of straightline method. If such record is maintained manually, it is always subject to erros and a lot of cumbersome exercise.
So to avoid it, reducing balance method may be called preferable. Specially for those who don't have sophisticated systems and resources.
Regards,
Despite my above views, I always advise people to follow reducing balance method. This is because people at large don't have good computerized systems which can ensure that depreciation is not charged on fully depreciated assets; which is always a threat in case of straightline method. If such record is maintained manually, it is always subject to erros and a lot of cumbersome exercise.
So to avoid it, reducing balance method may be called preferable. Specially for those who don't have sophisticated systems and resources.
Regards,
