The correct answer is: A. plant value.
Depreciation is the decrease in the value of an asset over time due to wear and tear, obsolescence, or other factors. It is a non-cash expense that is used to account for the decline in the value of an asset over its useful life.
There are a number of methods that can be used to apportion depreciation, including:
- Straight-line depreciation: This method allocates an equal amount of depreciation expense to each accounting period over the asset’s useful life.
- Declining balance depreciation: This method allocates a larger amount of depreciation expense in the early years of an asset’s life and a smaller amount in the later years.
- Sum-of-the-years’-digits depreciation: This method allocates a larger amount of depreciation expense in the early years of an asset’s life and a smaller amount in the later years.
The method that is used to apportion depreciation will depend on a number of factors, including the type of asset, the company’s financial reporting policies, and the tax laws in the country where the company operates.
Option B, plant size, is not a valid basis for apportioning depreciation. The size of a plant does not necessarily correlate with its value or its useful life.
Option C, working days, is not a valid basis for apportioning depreciation. The number of days that a plant is in operation does not necessarily correlate with its wear and tear or its obsolescence.
Option D, output produced, is not a valid basis for apportioning depreciation. The amount of output that a plant produces does not necessarily correlate with its wear and tear or its obsolescence.