Reducing Balance Method of DepreciationA fixed percentage of the diminishing value of the asset is written off each year. Depreciation is charged on written down value every year. The rate of depreciation remains constant whereas the amount of depreciation goes on decreasing.
This method is also known as written down value method (WDV method). The value of asset can never be extinguished as in straight line method. This method is logical in the sense that, as the asset goes older, the amount of depreciation also goes on decreasing.