Japan: Declining-Balance Method of Depreciation
Use
Using this method, the system determines the depreciation percentage rate from the ratio between the relative scrap or cutoff value and the acquisition value. The system then determines the n-th root of this ratio (n = useful life). The depreciation percentage rate is the complement of the percentage that was thus determined. This depreciation percentage rate is in effect for the entire useful life of the asset.
Calculation : Depreciation = Net book value * depreciation percentage rate
APC: 1000
Scrap value: 10%
Useful life: 10 years
Depreciation percentage rate = 1 - ((1000/10000)1/10) = 20 %