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Naturaleza del uso

  • Apuntes
  • Revisión por tema
    Tashika B.
    US
    Tashika B.

    What is the nature of use?

    BabaJide Martins F.
    TR
    BabaJide Martins F.

    Nature of use: Lectures have been given earlier about straight line method and diminishing balance method. Straight line method is widely use, though it depends on how an asset generates revenue.

    Alice B.
    GQ
    Alice B.

    Nature of use of an asset to me is mostly based on the revenue generated by the asset and the period generated, the revenue generated has a pattern and this determines the method of depreciation to be implemented which in turn follows the pattern of the revenue generated by the asset, which could be straight line or diminishing methods of depreciation.

    Morne V.
    ZA
    Morne V.

    Information about straight line method and diminishing method has been given clearly. No confusion has been found out in this course

    Sunday O.
    NG
    Sunday O.

    Nature of use

    Odongo M.
    UG
    Odongo M.

    Accounting -> Nature of use Nature of use The nature of use for an asset differs considerably. The use creates a revenue pattern and the method of depreciation chosen should match that pattern. For instance, if an asset generates revenue evenly over its life then the straight line method may be regard as appropriate. Straight line method of depreciation involves the equal allocation of depreciation expense to each reporting period. This method is simple to calculate and assumes that a non-current asset contributes equally to revenue in each reporting period. It may be allocated on the basis of time. However, should it generate more revenue in the early years, then the diminishing balance method may be more suitable. Diminishing balance method allocates greater amounts of depreciation in the earlier years of an asset's life. This method is used where assets generate greater revenue in the earlier years of the asset life. Some assets are more efficient in those early years. If the asset requires time consuming maintenance in later years then this is a reason for using the diminishing balance approach. Fear of the asset becoming obsolete is another reason for the use of this method.

    Manish K.
    NP
    Manish K.

    Information about straight line method and diminishing method has been given clearly. No confusion has been found out in this course.

    Penelope M.
    US
    Penelope M.

    straight line method dimishing line method

    Adil N.
    MA
    Adil N.

    Why the depreciation methos is determined on the nature of use for an asset?

    Gloria N.
    AE
    Gloria N.

    clear

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