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Answer Posted / bimlesh
two methods
reducing balance method and
straight line method
an example will make it clear.suppose a plant cost rs 10000
and its life is 10 years then in straight line method depn
will be 1000 for each year.
on the other hand in reducing balance method if we assume
that rate of depn is 10% then
1st year depn = 10000 *10% = 1000
2nd year depn = (10000-1000)*10% =900
3rd year depn = (9000-900)*10% = 810 and so on
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