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Basic Question 14 of 19
The annual depreciation expense, using the double-declining-balance method, is equal to ______.
B. the straight-line rate times twice the book value
C. twice the straight-line rate times the net book value
A. twice the straight-line rate times the difference between original cost and salvage value
B. the straight-line rate times twice the book value
C. twice the straight-line rate times the net book value
User Contributed Comments 8
| User | Comment |
|---|---|
| kalps | Twice being 2/N X (cost - acc depn) (NB salvage value is not subtracted) - wehere as it is in Straight line depn |
| shasha | you may put it in this way: rate for straight line is "1/N", rate for DDB is "2/N". |
| liana | Can somebody please explain to me why this answer is not wrong ? Thank u |
| thekobe | liana, net book value doesnt consider the salvage value |
| johntan1979 | Straight line rate = 1/N Where N = Estimated Useful Life DDB = 2 x 1/N x Net book value |
| Shaan23 | Liana. Exactly my point on this question. Dont use calculator shortcuts. Just do the example in the text and you'll know this section inside out. |
| davidt876 | Dont be a dick Shaan23 |
| chesschh | feeling like I dont have an excuse for only reading the notes... |
You have a wonderful website and definitely should take some credit for your members' outstanding grades.
Colin Sampaleanu
Learning Outcome Statements
analyze and interpret financial statement disclosures regarding property, plant, and equipment and intangible assets
CFA® 2024 Level I Curriculum, Volume 2, Module 7.