There is a range of acceptable depreciation methods, and management should choose the method as appropriate to the type of asset and its use in the business in order to allocate depreciation as fairly as possible to the period expected to benefit from asset's use. As the company's senior accountant, the Chief Executive Officer of the company that carries on business as a home furnishing manufacturer has requested you to write a brief memorandum to explain how they as management should determine what is the most appropriate method for depreciating the company's non-current assets? The company has been in practice of writing off their non-current assets by straight line method, but the managing director is wondering the factors they should consider to determine the useful life and annual depreciation expenses.

Required: Draft a memorandum to satisfy the Chief Executive Officer's request (9 marks)