Difference Between WDV and SLM

SLM is a method of depreciation in which the cost of the asset is spread uniformly over the life years by writing off a fixed amount every year. WDV is a method of depreciation in which a fixed rate of depreciation is charged on the book value of the asset, over its useful life.

1. Which is better SLM or Wdv?
2. What is SLM depreciation method?
3. What is SLM in accounting?
4. How is Wdv depreciation calculated?
5. Which depreciation method is best?
6. What are the 3 methods of depreciation?
7. What depreciation method does Amazon use?
8. Is Straight line depreciation the same every year?
9. What is Wdv in depreciation?
10. What is original cost method?
11. What is reducing balance?
12. What are the main causes of depreciation?

Which is better SLM or Wdv?

SLM is preferred to be applied to fixed assets whose utility is equally spread across the years of its useful life. ... WDV is preferred to be applied for fixed assets that have a higher degree of wear and tear or obsolescence i.e.: whose benefits are higher in the initial years than in subsequent years.

What is SLM depreciation method?

Also known as straight line depreciation, it is the simplest way to work out the loss of value of an asset over time. Straight line basis is calculated by dividing the difference between an asset's cost and its expected salvage value by the number of years it is expected to be used.

What is SLM in accounting?

According to the Straight line method, the cost of the asset is written off equally during its useful life. After the useful life of the asset, its value becomes nil or equal to its residual value. ...

How is Wdv depreciation calculated?

8,100 ( 10% of rs. 81,000 [90,000 – 9,000]). This method is also called reducing balance method. In the WDV method, the amount of depreciation goes on decreasing with time.
...
Straight Line Method (SLM)

Which depreciation method is best?

Straight-Line Method: This is the most commonly used method for calculating depreciation. In order to calculate the value, the difference between the asset's cost and the expected salvage value is divided by the total number of years a company expects to use it.

What are the 3 methods of depreciation?

Accountants must adhere to generally accepted accounting principles (GAAP) for depreciation. There are four methods for depreciation: straight line, declining balance, sum-of-the-years' digits, and units of production.

What depreciation method does Amazon use?

For server infrastructure, Amazon uses straight-line depreciation over the estimated useful life; extending the useful life of an asset results in lower depreciation expense per year.

Is Straight line depreciation the same every year?

Straight-line depreciation is the simplest method for calculating depreciation over time. Under this method, the same amount of depreciation is deducted from the value of an asset for every year of its useful life.

What is Wdv in depreciation?

It is also known as Reducing Balance or Reducing Installment Method or Diminishing Balance Method. Under this method, the depreciation is calculated at a certain fixed percentage each year on the decreasing book value commonly known as WDV of the asset (book value less depreciation).

What is original cost method?

Straight line depreciation method or original cost method is the simplest and most commonly used depreciation method. Under this method, the difference between the original cost of an asset and its estimated scrap value is calculated and then divided by the number of years in its estimated life.

What is reducing balance?

Reducing balance depreciation is a method of calculating depreciation whereby an asset is expensed at a set percentage. ... In other words, more depreciation is charged at the beginning of an asset's lifetime and less is charged towards the end.

What are the main causes of depreciation?

The causes of depreciation are:

• Wear and tear. Any asset will gradually break down over a certain usage period, as parts wear out and need to be replaced. ...
• Perishability. Some assets have an extremely short life span. ...
• Usage rights. ...
• Natural resource usage. ...
• Inefficiency/obsolescence.