Sinking Fund Method Under this method, the amount of depreciation charged every year is transferred to the sinking fund account. This amount is then invested in Government securities. Also, the interest earned on these securities is reinvested. The major differences between sinking fund depreciation and annuity method of depreciation. Sinking fund depreciation. Amount generated through depreciation is invested in market securities. Funds available for replacement of assets. First entry of interest will be made at the end of second year. Sinking fund table is used to calculate ... The sinking fund method of depreciation is used when an organization wants
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