Depreciation methods are the means used to allocate the cost of an asset over its useful life. These methods include straight-line depreciation, accelerated depreciation, double declining balance, sum of years digits, and units of production. Straight-line depreciation is the most common method and involves taking a fixed amount of depreciation each year. Accelerated depreciation is used when a business wants to accelerate the write-off of the cost of an asset. Double Declining Balance is a form of accelerated depreciation where twice the straight-line rate of depreciation is applied to the asset’s remaining book value. Sum of Years Digits works by depreciating a higher amount in the earlier years of an asset’s life and lower amounts in later years. Finally, Units of Production measures the decline in value of an asset based on its usage or output during a given period. All these depreciation methods are important for businesses to understand as they have implications for their taxes and financial records.