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Question

Under written down value method of Depreciation, the WDV of the asset is always:

A Less than zero Correct Answer Incorrect Answer
B Equal to zero Correct Answer Incorrect Answer
C Equal to the salvage value of the asset Correct Answer Incorrect Answer
D More than zero Correct Answer Incorrect Answer
E None of these Correct Answer Incorrect Answer

Solution

Under the written down value (WDV) method of depreciation, the WDV of the asset is always more than zero. The WDV of an asset is the value of the asset after deducting the accumulated depreciation from its original cost. Under the WDV method, depreciation is charged at a fixed percentage on the WDV of the asset each year, which means that the WDV will decrease each year. However, the WDV can never be zero or less than zero because the asset still has some value, even if it has been fully depreciated.

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