Depreciation under Reducing Balance Method

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Depreciation under Reducing Balance Method

In reducing balance method more depreciation is charged at the beginning of the asset and less is charged towards the end, because asset is more producible and efficient in the start. Therefore it generate more revenue as compared to later years.
In reducing balance method depreciation rate is calculated and then every year such depreciation rate is charged on residual value.
Now the question is that how can we find the rate of depreciation for Reducing Balance Method ?


Formula is given below

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