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.

Из главы 3:

article

Now Playing

3.7 : Calculating Depreciation: Written-down-value Method

Analysis of Financial Statements

33 Просмотры

article

3.1 : Understanding Financial Statements

Analysis of Financial Statements

147 Просмотры

article

3.2 : Analysis of Financial Statements

Analysis of Financial Statements

69 Просмотры

article

3.3 : Balance Sheet

Analysis of Financial Statements

73 Просмотры

article

3.4 : Fixed Assets

Analysis of Financial Statements

89 Просмотры

article

3.5 : Depreciation on Fixed Assets

Analysis of Financial Statements

34 Просмотры

article

3.6 : Calculating Depreciation: Straight-line Method

Analysis of Financial Statements

24 Просмотры

article

3.8 : Calculating Depreciation: Units of Production Method

Analysis of Financial Statements

11 Просмотры

article

3.9 : Current Assets

Analysis of Financial Statements

21 Просмотры

article

3.10 : Non-current Liabilities

Analysis of Financial Statements

21 Просмотры

article

3.11 : Current Liabilities

Analysis of Financial Statements

21 Просмотры

article

3.12 : Shareholder's Equity

Analysis of Financial Statements

38 Просмотры

article

3.13 : Income Statement

Analysis of Financial Statements

28 Просмотры

article

3.14 : Income Statement: Expenses

Analysis of Financial Statements

19 Просмотры

article

3.15 : Income Statement: Income

Analysis of Financial Statements

17 Просмотры

See More

JoVE Logo

Исследования

Образование

О JoVE

Авторские права © 2025 MyJoVE Corporation. Все права защищены