Depreciation methods — which yields higher book value than straight-line? Select the method that results in book values that are greater (i.e., depreciate more slowly) than those from the straight-line method over the life of the asset.

Introduction / Context:
Different depreciation methods alter the timing of expense recognition. Accelerated methods charge more earlier, leading to lower early book values. Conversely, methods that defer charges produce higher early book values. Knowing these patterns is important when covenants, asset disposals, or tax timing matter.

Given Data / Assumptions:

• Straight-line is the baseline for comparison.
• We compare book values across methods at the same service year.

Concept / Approach:
The sinking fund method sets annual depreciation charges that start small and increase each year such that the accumulated fund (with interest) equals the cost minus salvage at end of life. Because the yearly depreciation is low in early years, the remaining book value stays higher than with straight-line for much of the life. In contrast, declining balance and sum-of-the-years-digits are accelerated methods producing lower early book values than straight-line.

Step-by-Step Solution:

Verification / Alternative check:
A simple two-year example with life 5 years shows SF annual charges increasing, while straight-line remains constant. Early-year SF book values exceed straight-line book values.

Why Other Options Are Wrong:

Common Pitfalls:
Equating tax accelerated depreciation with financial reporting; schedules and permitted methods can differ. Always specify method and basis.

Final Answer:
Sinking fund method