Asked by margaux haguenauer on May 23, 2024
Verified
Residual value is not incorporated in the initial calculations for double-declining-balance depreciation.
Double-Declining-Balance
A method of accelerated depreciation where an asset's book value is decreased at double the rate of its straight-line depreciation.
Residual Value
It's the estimated value that an asset will realize upon its sale at the end of its useful life, after depreciation has been taken into account.
- Attain an understanding of the essence and systematic procedure of depreciation, involving distinct methods and calculations.
Verified Answer
SS
Simran SohalMay 25, 2024
Final Answer :
True
Explanation :
Residual value, also known as salvage value, is not taken into account when calculating double-declining-balance depreciation. This is because the double-declining-balance method assumes that the asset will be fully depreciated over its useful life, and there will be no residual value left at the end.
Learning Objectives
- Attain an understanding of the essence and systematic procedure of depreciation, involving distinct methods and calculations.