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What is the factor to identify the best depreciation method that should be used to calculate the depreciation expense?

Accounting Economics
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Question added by Mohamed Ghazi CMA , Finance and Budget Manager , Ernst & Young
Date Posted: 2016/07/07
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Farhana Siddique Fari
by Farhana Siddique Fari , Coordinator , Coordinator at DFA, Dr Fazeela Abbasi, Advanced Skin, Laser & Hair Institute, Islamabad.

I agree with your answer Mr.  Mohamed Ghazi. thanks

Mohamed Ghazi CMA
by Mohamed Ghazi CMA , Finance and Budget Manager , Ernst & Young

what depreciation does is match the expense (cost) of acquiring the asset with the revenues that it will generate over its useful life by spreading the recognition of expense of acquisition over the time period during which the asset will be useful (provide revenue) to the company. This is the concept of matching.

Deleted user

FIRST TELL ME THE INDUSTRY AND ASSET TYPE THEN ONLY WE CAN ANALYSE WHICH IS THE BEST DEPRICIATION METHOD ALL INDUSTRY CAN'T USE SAME DEPRICIATION METHOD

Husainee kotwal
by Husainee kotwal , ACCOUNTANT , ABDULMOHSIN ABDULAZIZ BABTAIN CO.WLL

Straight  line method according to the life of assets  (Value of asset/ Number of years asset life)

Loilee Jonathan Tolentino CPA CMA
by Loilee Jonathan Tolentino CPA CMA , Senior Accountant / Team Lead , Dubai Holding

The tax laws is the best factor. This will determine what is the most advantageous depreciation method for the company.

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