The declining balance and double declining balance methods let you capture most of an asset’s depreciation early in its economic life. These aggressive depreciation schedules generate huge tax offsets in the first few years. Using a variable declining balance approach mixes declining balance and straight line strategies to capture more of the benefits toward the end of the asset’s life.
- The declining balance and double declining balance methods…let you capture most of an asset's depreciation…early in its economic life.…For a building, which has a useful life of 30 years,…these aggressive depreciation schedules…generate huge tax offsets in the first few years.…The downside of this type of schedule is that…you get to offset almost no depreciation…toward the end of an asset's economic life.…Using a variable declining balance approach makes this…declining balance and straight line strategies…to capture more of the benefits…towards the end of an asset's life.…
I will show you how to use…the variable declining balance method in this movie.…My sample file is variable declining balance oh two oh five,…and you can find it in the chapter two folder…of your exercise files collection.…The goal of the variable declining balance method…is to capture as much depreciation as you can…at the start but then, when the…level of depreciation per year reaches…what would be straight line depreciation,…then you start using that method.…
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- Analyzing loans, payments, and interest
- Calculating depreciation
- Determining values and rates of return
- Calculating bond coupon dates and security durations
- Calculating security prices and yields
- Calculating prices and yields of securities with odd periods
- Analyzing simulation results
Skill Level Intermediate
1. Analyzing Loans, Payments, and Interest
2. Calculating Depreciation
3. Determining Values and Rates of Return
4. Calculating Bond Coupon Dates and Security Durations
5. Calculating Security Prices and Yields
6. Analyzing Simulation Results
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