Income Statement

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Depreciation approaches

  • Straight-line depreciation is a linear approach to depreciate equipment (the same amount month by month or year by year.

  • Units of production is based on how much the equipment is being used, which is how it is being depreciated. For example, a truck, manufacturing equipment, etc.

  • Double Declining Balance Approach is an accelerated method used when an asset loses most of its value or usefulness early on. Typical examples are computers, vehicles, and technology equipment, where the asset is most productive when new and quickly becomes obsolete.


<ul><li><p>Straight-line depreciation is a linear approach to depreciate equipment (the same amount month by month or year by year.</p></li><li><p>Units of production is based on how much the equipment is being used, which is how it is being depreciated. For example, a truck, manufacturing equipment, etc.</p></li><li><p>Double Declining Balance Approach is an accelerated method used when an asset loses most of its value or usefulness early on. Typical examples are computers, vehicles, and technology equipment, where the asset is most productive when new and quickly becomes obsolete.</p></li></ul><p></p>
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