Map of europe and asia on The first is the straight line method where the annual amount of depreciation is calculated by subtracting the estimated disposable residual value (scrap) from the original cost of the asset and then by dividing that amount by the number of years of its expected life. The second method is the declining balance method where the actual depreciation expense is set as a constant proportion of the value of the asset. Since the value of the asset declines over time so does the annual absolute amount of depreciation. The peculiar problem is the time of high inflation when the replacement cost of any asset may be considerably higher then historic cost. In these circumstances, the method of replacement-cost depreciation is used. This method implies periodic revaluation of assets and the adjustment of depreciation rates. Depreciation is accepted as an allowance against profits for tax purposes. Map of europe and asia 2016.
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