The method that does not necessarily produce a declining or constant pattern of depreciation over an asset's service life is the units of production method.
What do you understand by the units of production method?
- The unit of production method is a method of calculating the depreciation of an asset's value over time. It becomes useful when the value of an asset is more related to the number of units it produces than the number of years it is used. This method often results in larger depreciation deductions in years when the asset is heavily used, which can then offset periods when the equipment is used less.
- This method can be compared to time-based depreciation measures, such as the straight-line or accelerated methods.
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