1) More Realistic:
More realistic reflection of an asset's actual resale value, Because the assets can be sell for a higher value in earlier year, and less in the later year.
2) Expectation of output:
The expected benefit from the use of the asset, the productivities in the earlier year is higher than the latter year.
The reducing balance method can help the company to lower the tax in earlier year, it is a heavy burden for the company to acqusit the asset as the same time pay tax.(The money used in purchasing the asset may probably cause out financial problem to the company.
2007-01-18 17:51:42 補充：