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Financial Accounting

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Deprecation Methods Concepts

FINACT-R2JU@X

The Units of Production and Straight-Line Methods are two depreciation methods described below.

The Units-of-Production method of cost allocation is

method of depreciation that measures the service of a machine in terms of

it will provide to the purchaser. The estimated salvage value

deducted from the cost of the asset to determine the allocation base under this method.

The Straight-Line method is

method of depreciation that measures the service of a machine in terms of

it will provide to the purchaser. The estimated salvage value

deducted from the cost of the asset to determine the allocation base under this method.