Monday, December 24, 2012

Difference Between Shinking Fund Method And Annuity Method Of Depreciation

Here we are giving you the differences between Shinking Fund Method And Annuity Method Of Depreciation-

               Sinking Fund Method
                    Annuity Method
1.       Depreciation charged is invested in outside securities
                  Not invested in outside securitites
2.       First interest is earned during second year and the first entry for investment of interest is made at the end of second year
                    Interest is earned from first day
3.       Actual interest is received
                No interest received only adjustment takes place
4.       Depreciable amount will be calculated with the help of sinking fund table
                       Annuity table is created
5.       Depreciation charged is cost minus interest
            Plus interest
6.       Amount of interest increases year by year
                          Decrease year after year
7.       Values of asset remain same
                   Value of assest decease


  1. Great post. I have been doing some research on annuities lately. I just recently found out that you can cash out your annuity payments. Does that mean that anyone like myself could buy someone's annuity payments? I would love to do something like that.