Straight Line Method (SLM): This method is based on the assumption of equal usage of the asset over its entire useful life. It is called straight line because if the amount of depreciation and corresponding time period is plotted on a graph, it results in a straight line. However, this method assumes the same amount of utility in different accounting years, which is often faulty. As work efficiency decreases and repair and maintenance expenses increase with time, the total amount charged against profit (depreciation and repairs) keeps increasing year by year rather than remaining uniform.

Written Down Value Method (WDV): This method is based on a more realistic assumption. A large portion of the cost is written-off in earlier years, which reduces the loss due to obsolescence. This method results in an almost equal burden of depreciation and repair expenses taken together every year on the profit and loss account. The Income Tax Act accepts this method for tax purposes. However, a limitation is that the value of the asset can never be zero, and it is difficult to ascertain a suitable rate of depreciation.

Distinction and Suitability: The primary differences and suitable situations are:

1. Burden on Profit: Under SLM, the total charge (depreciation and repairs) increases every year. Under WDV, the burden remains almost equal throughout the asset's life.
2. Asset Value: In SLM, depreciation is usually calculated to write off the asset, whereas in WDV, the depreciable cost cannot be fully written-off (value never becomes zero).
3. Suitability: WDV is suitable for fixed assets which last for long and require increased repair and maintenance expenses with the passage of time, or where the obsolescence rate is high. SLM is suitable where the assumption of equal usage applies.