Final answer:
Most asset classes calculate Capital Cost Allowance (CCA) using the declining balance method for income tax purposes, applying a fixed percentage of the remaining balance each year.
Step-by-step explanation:
Most asset classes use the declining balance method in the calculation of Capital Cost Allowance (CCA) for income tax purposes. The declining balance method is a form of accelerated depreciation where a fixed percentage of the balance of the cost of the asset is depreciated each year. This method contrasts with the straight-line depreciation method where an asset is depreciated by an equal amount each year over its useful life. Although declining balance is commonly used, different asset classes may be associated with specific rates that dictate how quickly they depreciate.