| Declining Balance Method | |
 A common depreciation-calculation system that involves applying the depreciation rate against the non-depreciated balance. Instead of spreading the cost of the asset evenly over its life, this system expenses the asset at a constant rate, which results in declining depreciation charges each successive period. |
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 For example, if an asset that costs $1,000 is depreciated at 25% each year, the deduction is $250.00 in the first year and $187.50 in the second year, and so forth. |
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 Appreciating Depreciation - Companies make choices and assumptions in calculating depreciation, and you need to know how these affect the bottom line. Reading The Balance Sheet - Learn about the components of the statement of financial position and how they relate to each other. Advanced Financial Statement Analysis - Learn what it means to do your homework before investing in a company. Get a deeper understanding of the structure of financial statements and what they tell you about a company's performance and reporting practices. |
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