Asked by tabatha nieves on May 08, 2024
Verified
Carrying amount is used in determining the amount that the diminishing-balance rate is applied to.
Carrying Amount
The value of an asset or liability as recorded in a company's books, reflecting its cost minus any depreciation or amortization.
- Determine the book value of an asset and recognize its constituent components.
Verified Answer
JM
Jackson McLoughlinMay 10, 2024
Final Answer :
True
Explanation :
In the diminishing balance method of depreciation, the carrying amount (book value) of the asset, which is its cost minus any accumulated depreciation, is used as the base to apply the depreciation rate. This results in a decreasing annual depreciation expense over the asset's useful life.
Learning Objectives
- Determine the book value of an asset and recognize its constituent components.