New Enroll in our GIC Finance Online Course Here!

    Register

    Question

    Under which method of Depreciation, the written down

    value of the asset is always more than zero:
    A SLM Correct Answer Incorrect Answer
    B WDV Correct Answer Incorrect Answer
    C Sum of years digit Correct Answer Incorrect Answer
    D Units of production Correct Answer Incorrect Answer
    E Any of the above Correct Answer Incorrect Answer

    Solution

    Under the written down value (WDV) method of depreciation, the WDV of the asset is always more than zero. The WDV of an asset is the value of the asset after deducting the accumulated depreciation from its original cost. Under the WDV method, depreciation is charged at a fixed percentage on the WDV of the asset each year, which means that the WDV will decrease each year. However, the WDV can never be zero or less than zero because the asset still has some value, even if it has been fully depreciated.

    Practice Next

    Relevant for Exams: