Answer
The composite method is appropriate for an organization which owns a large number of assorted plant assets and which would find it impractical to keep detailed records for them.
Work Step by Step
The main advantage is that it is not mandatory to keep detailed records for each plant asset in the group. The main disadvantage is that after a period of time the book value of the plant assets may not reflect the proper carrying value of the assets. Inasmuch as the accumulated depreciation account is debited or credited for the difference between the cost of the asset and the cash received from the retirement of the asset the accumulated depreciation account is self-correcting over time.
