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Sum of Years’ Digits Method

2. Sum of Years’ Digits Method :

In this method, the charge for depreciation for an accounting period is calculated in proportion of the remaining life of the asset at the beginning of every accounting period. The rate of depreciation is determined by the fraction where denominator is the sum of the digits representing the life of the asset and the numerators are individual digits used in the life of asset taken in reverse order.

Depreciation goes on decreasing every year.

 

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