Is it appropriate to calculate depreciation using two different methods? Which depreciation method gives you the highest depreciation expense in the first year? Why?

Theoretically, the selection of a depreciation method should be based on the expectations regarding the pattern of decline in the service potential of the asset under consideration. Because both the nature and the characteristics of various assets may vary significantly, alternative depreciation patterns may be justified. Accordingly, there are a number of acceptable depreciation methods which mathematically approximate the possible pattern of use expected from an asset. However, in practice, the criteria for selecting a particular depreciation method are often not determinable. The management may select the method which contributes to the desired financial results that it hopes to achieve over time. The consistency principle does require that once a method has been adopted for a particular type of asset, the firm must continue to use that method over time.

The depreciation method that gives the company the highest depreciation expense in the first year is the double-declining balance method. The procedures used in applying the double-declining balance method arbitrarily double the depreciation rate which would be used in calculating deprecation under the straight-line method. This increased rate is then applied to the book value (i.e., the cost of the asset less the total depreciation taken to date) of the assets