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The company uses the straight line method of depreciation on all assets except those of freehold and leasehold land. This is because in such cases, the useful life of the asset cannot be determined. The company uses the residual value in the owned assets so as to determine the depreciation over the remaining costs of the assets. The residual values which are used by the company are 20% because the company estimates that after the useful life of the assets, the assets can be disposed off for 20% of the total cost of the asset. Depreciation policy of Aviator by Raid Obudan on Prezi. (n.d.)
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