THE ADVISER The Adviser: Picking the Right Depreciation The Adviser is a monthly activity where you take on the role of an accounting guru whose expertise will help local businesses. It is your job to make sure your clients are on the path to financial success. As the Adviser, you were recently contacted by Lamar Bermuda, owner of Lamar's Lawn Care Service. Over the past year, Lamar's business has been booming. In fact, it has been so busy that Lamar has expanded his business. He purchased a new commercial-grade lawnmower for $14,000 on January 1, which he expects will last for five years. Although Lamar can afford this new expense, he's worried it will greatly reduce his net income for the year. After hearing Lamar's dilemma, you recommend he calculate the newly purchased lawnmower as an asset on his balance sheet and then use a depreciation method to show how it has decreased in value over time due to wear and tear. There are three common depreciation methods you decide to evaluate: Straight Line Depreciation, Double Declining Balance and Units of Activity Depreciation. As the Adviser, you will need to figure out which depreciation method makes the most sense for your client. Use the worksheet below to work through the three depreciation methods and provide the recommendation Lamar needs for his lawn care company.