I. Advantages of Straight Line Method : 

a. It is simple to calculate. 

b. Asset can be completely written off, i.e., asset can be depreciated until the net scrap value is zero. 

c. Same amount of depreciation is charged every year. Therefore, it helps in easy comparison of Profit and Loss Account for different years. d. It is used for assets that have low repairs and maintenance expenses and are continuously used over a period of time

Limitations of Straight Line Method : 

a. Burden of depreciation is mere on profit and loss account in the later years, when repair and maintenance costs increase, as asset becomes older. b. Value of asset becomes zero in the books even if asset is still in usable condition in business. 

Uses of Straight Line Method : 

• This method is useful where repairs and maintenance expenses on asset are low. 

• It is also useful when an asset is continuously used from one year to another. 

• It is useful when the value of assets, such as patent, copyright, goodwill, etc., becomes zero

II. Written Down value Method :

This method is applicable where depreciation is charged on the diminishing balance, i.e., book value of the asset. In this method, asset’s value goes on diminishing year after year and the amount of depreciation declines. 

Advantages of Written Down value Method : 

a. It is based on the logical assumption that asset is used more in the earlier years, so more cost is charged in form of depreciation. 

b. It is suitable for the assets where repairs are more in the later years, as depreciation is lesser and on a whole the combined burden of depreciation and repairs experts equal pressure on the net profit over years. 

c. This method is accepted by the income tax authorities. 

d. As more depreciation is charged the earlier years, so the loss due to obsolescence of the asset is reduced.

Limitations of Written Down Value Method :

a. It is difficult to calculate and is a time consuming process. 

b. The value of an asset cannot be zero, thus the asset cannot be completely written off, 

c. There arises shortage of fuflds for replacement of new asset. This happens due to the fact that the amount of depreciation is retained and used in the business. Consequently, at the end of the useful life of an old asset, business finds it difficult to arrange funds for its replacement. Uses of Written Down Value Method :

a. It is useful when assets have long life. 

b. It is useful for those assets that require more repair and maintenance costs in the later years. 

c. It provides easy calculation to provide depreciation of additional asset purchased during a year.