Question

What are the different kinds of special depreciation methods?

Answer 1

Special depreciation methods include the double declining balance method, sum-of-the-years digits method, and units-of-production method.

Step-by-step explanation:

Special depreciation methods are used to calculate the depreciation of fixed assets over time. These methods include:

1. Double Declining Balance Method: This method allows for a higher depreciation expense in the early years of an asset's life, reflecting the belief that assets are more productive in their early years.
2. Sum-of-the-Years-Digits Method: This method accelerates the depreciation expense by using a declining fraction based on the asset's useful life. The fraction starts with the sum of the digits from 1 to the useful life and decreases each year.
3. Units-of-Production Method: This method calculates depreciation based on the asset's production or usage. The depreciation expense is higher in years of heavy use and lower in years of light use.