The Written-Down Value (WDV) method, also known as the declining balance method, is a depreciation technique where an asset's value decreases more rapidly in the earlier years of its useful life. This approach initially results in higher depreciation expenses, followed by lower charges in subsequent years, reflecting the asset's declining productivity and value over time.
For example, if a company purchases machinery for $100,000 with a five-year useful life, depreciating at 20% annually, the first year's depreciation would be $20,000. In the second year, depreciation would be 20% of the net book value ($80,000), amounting to $16,000. In the third year, Depreciation expense would decrease further to $12,800, and so on. The method reflects the idea that the machinery was more productive and valuable in its early years.
The method commonly applies to assets that depreciate quickly, such as technological equipment or vehicles.
장에서 3:
Now Playing
Analysis of Financial Statements
33 Views
Analysis of Financial Statements
157 Views
Analysis of Financial Statements
78 Views
Analysis of Financial Statements
86 Views
Analysis of Financial Statements
93 Views
Analysis of Financial Statements
37 Views
Analysis of Financial Statements
27 Views
Analysis of Financial Statements
14 Views
Analysis of Financial Statements
24 Views
Analysis of Financial Statements
22 Views
Analysis of Financial Statements
22 Views
Analysis of Financial Statements
41 Views
Analysis of Financial Statements
31 Views
Analysis of Financial Statements
20 Views
Analysis of Financial Statements
20 Views
See More
Copyright © 2025 MyJoVE Corporation. 판권 소유