Differentiate between Straight Line and Write-Down Value methods of depreciation.

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Bases of DifferenceStraight Line MethodWritten Down Value Basis of charging depreciationAnnual depreciationTotal charge against profit and loss account in respect of depreciation and repairRecognition by income TaxSuitabilityOriginal CostFixed yearUnequal year after year.Not recognizedIt is suitable for assets in which repair charges are less, the possibility of and obsolescence is low scrap value depends upon the time period involved.Book valueDeclines year after year.Almost equal every year.RecognizedIt is suitable for assets, which are affected by technological changes and require more repair expenses with passage of time.

Bases of Difference	Straight Line Method	Written Down Value
Basis of charging depreciation Annual depreciation Total charge against profit and loss account in respect of depreciation and repair Recognition by income Tax Suitability	Original Cost Fixed year Unequal year after year. Not recognized It is suitable for assets in which repair charges are less, the possibility of and obsolescence is low scrap value depends upon the time period involved.	Book value Declines year after year. Almost equal every year. Recognized It is suitable for assets, which are affected by technological changes and require more repair expenses with passage of time.

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