declining balance method (of depreciation)
- noun
- /dɪˈklaɪnɪŋ ˈbæl.əns ˈmɛθəd ʌv dɪˌprɛʃiˈeɪʃən/
- Specialized
:
método de saldo decreciente
- Using the declining balance method of depreciation, assets lose value more quickly in the early years.
Examples
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Our company adopted the declining balance method of depreciation to better match expenses with revenues.
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The declining balance method (of depreciation) is commonly used for machinery.
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The accountant explained the benefits of switching to the declining balance method of depreciation for tax purposes.
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Many accountants prefer the declining balance method (of depreciation) for its accuracy.
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Our company adopted the declining balance method of depreciation to better match expenses with revenues.
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The accountant explained the benefits of switching to the declining balance method of depreciation for tax purposes.
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Using the declining balance method of depreciation, assets lose value more quickly in the early years.
Synonyms
A way to reduce an asset's value by a fixed percent each year, with larger reductions at first
How Accelerated
- Specialized
- Specialized
Surface Forms
Morphology
decline + balance + method + (of + depreciation)
The phrase is compositionally built: 'declining' (becoming smaller) modifies 'balance' (remaining amount) and 'method' signals a procedure, so a learner who knows those words can infer it is a procedure in which the remaining balance decreases over time. The parenthetical 'of depreciation' makes the accounting domain explicit; while the exact calculation (fixed percentage of remaining book value) is a technical detail, the overall concept is directly derivable from the constituents.
Etymology
Declining balance method (of depreciation) gives a simple image: a remaining balance that is declining because each year you take the same percentage from what is left. So, the asset 'loses value' faster at the start and less later, which explains why this method spreads loss more quickly in early years.
