alleryWhich method results in higher depreciation in earlier years?
AStraight Line Method
BEqual instalment method
CAverage annual method
DReducing Balance (WDV)
Answer & Solution
Correct answer: D. Reducing Balance (WDV)
1. WDV applies a constant rate to a diminishing base.
2. In year 1 the base equals cost; in later years it shrinks.
3. So depreciation is higher in earlier years and lower later, balancing rising repair costs.
_Source: ICAI BoS Foundation Paper 1, Ch 5 "Depreciation & Amortisation", §3.2_
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