Appraisal method of depreciation

Under the appraisal method of depreciation, depreciation is calculated as the decline in the appraised value of an asset from the beginning to the end of a reporting period. If there is no decline in the appraised value during the period, then no depreciation is charged to expense. This method is not considered acceptable under generally accepted accounting principles. A key problem with this method is that the appraisal value is a judgmental derivation, so a person could avoid charging depreciation by falsely inflating the ending appraised value of an asset.