Q.Which Depreciation method shall be efficient if repairs and maintenance cost of an asset increases as it grows older ?

The reducing (diminishing/written-down value) balance method suits an asset whose repairs rise with age, because its depreciation charge falls each year and balances the rising repairs. The correct answer is option (d).

Repairs and maintenance of most assets increase as they grow older. To keep the total cost of using the asset (depreciation + repairs) roughly constant each year, the depreciation charge should be:

• High in the early years (when repairs are low), and
• Low in the later years (when repairs are high). …