Quick questions on Depreciation of Non-Current Assets - TCE Accounting (Tasmania)

Straight-line charges the same expense every year.

Reducing-balance applies a fixed percentage to the carrying value, so the expense is largest in year one and falls each year. Residual value is not subtracted first.

Both methods spread the same total cost over the asset's life; they differ only in timing. Straight-line gives an equal charge each year and suits assets used evenly, such as buildings and fittings. Reducing-balance gives a high charge early that falls over time, which suits assets that are most productive or lose value fastest when new, such as vehicles and computers. The choice should reflect the pattern in which the asset's benefits are consumed, and once chosen it is applied consistently so results stay comparable across years.

A common TASC presentation sets the asset out in three figures: cost, less accumulated depreciation, equals carrying value. For the machine in the worked example after two years of straight-line depreciation, this reads cost $20\,000$, less accumulated depreciation $9\,000$, carrying value $11\,000$. Showing all three keeps both the historical cost and the amount consumed visible to the reader, which supports the reliability of the report.