Depreciation methods, justified against the alternative

Every year gives two possible depreciation methods and asks WHY one suits the specific asset better — not just how to calculate either.

The two methods, and when each is the better fit

STRAIGHT LINE: charges the SAME dollar amount every period (cost × a fixed percentage, or (cost − residual value) ÷ useful life). Best when the asset's benefit is used up evenly over time, regardless of how much it is actually used.
UNITS OF USE: charges an amount proportional to actual usage each period (a rate per hour, per kilometre, or per unit produced). Best when the asset wears out through USE, and usage varies significantly period to period.
The justification is always a COMPARISON: name both methods, then explain why the SPECIFIC pattern of this asset's wear (steady with time, vs varying with use) favours one over the other.

Worked example Justifying units of use over straight line for a treadmill A gym depreciates its treadmills using units of use (

2/hour) rather than straight line. Justify this choice. STRAIGHT LINE would charge the SAME depreciation expense every year regardless of how many hours the treadmills were actually used — a quiet year and a busy year would show identical wear-and-tear expense. UNITS OF USE charges depreciation based on actual hours used, so a busy year (more hours, more wear) shows a HIGHER expense, and a quiet year shows a lower one. Treadmill usage genuinely varies year to year with gym membership numbers and class schedules, so units of use MATCHES the expense to the actual wear and to the income earned from that usage — straight line would break this match. ✓ The justification names the SPECIFIC reason (usage varies, and units of use tracks that variation) rather than a generic "units of use is more accurate" with no mechanism explained. ✕

Justifying a method without comparing it to the alternative actually offered

A justification that only describes how the chosen method works, with no mention of why the OTHER named method would fit this asset less well, has not completed the comparison the question is asking for. Papers consistently offer both methods explicitly — always explain why the alternative would be the WORSE fit, not just why the chosen one is good.

Signal in the question	Method that best fits	Why
A rate per hour, km, or unit produced is given	Units of use	The wording itself signals usage-based wear
Usage is described as varying a lot year to year	Units of use	Matches the expense to actual wear each period
The asset's benefit is steady regardless of how much it is used	Straight line	A constant time-based charge fits steady wear
A fixed percentage per year is given, with no usage rate	Straight line	The wording signals a time-based charge

Practice for this standard covers the whole topic — flashcards and quiz.