The Depreciation Company The directors of the Depreciation Company are deciding on their accounting policy on the depreciation of their non-current assets.

They have just purchased some new assets that cost £200,000 and which they expect to sell after five years for £20,000.

a Calculate the depreciation expense in the income statement and the figures that will appear in the statement of financial position of the company assuming:
(i) They adopt the straight-line basis of depreciation (ii) They adopt the diminishing basis at 30 per cent b Advise the directors which method is the more appropriate and why.