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Depreciation
Accountancy
When should the method of depreciation of an fixed asset should be changed? And why? Give me one example. Thank you for your kind help.
Answers (1)
It should change depending on circumstances - when usage pattern of asset is changed or say benefits expected from asset now varies. Why? To reflect true costs to the business. Example: A company expected machinery to last 20 years and loose value equally over years. So, it used straight line method. But based on usage, it's losing much value in early years, so it may change to WDV method.
