1. Accelerated Amortization
Double – Declining Balance

2. Accelerated Amortization
Capital Assets can depreciate at different rates because of high or low usage.
Factory A uses its equipment 24 hours a day. Factory B uses its equipment 8 hours a day, 4 days a week.
Obviously, Factory A’s equipment will depreciated faster.
Capital Assets can depreciate rapidly because of a high degree of technological change and rapid obsolescence.
Computer Technology is probably the best example of this.
Accelerated Amortization better matches revenues to expenses, often capital assets will provide the most benefit to an organization in the first few years of operation

3. Double-Declining Balance Method
The difference between the Double Declining Balance and Declining Balance method, is that the yearly depreciation rate is multiplied by a amortization multiplier (in this case 2).
Net Book Value X
(Multiplier x Amortization Rate)
Amortization Expense =

4. Example
Ashley buys a new industrial robot to be used on the production line, it was purchased for $110,000 and has a yearly amortization rate of 20%.
This machine will be used 24 hours a day, 7 days a week, so Ashley has decided to use the Double Declining Balance Method to calculate the yearly amortization.
Calculate the yearly amortization for the first 3 years

5. Answer