Straight Line Depreciation Method

What is the Straight Line Depreciation Method?

Depreciation is an expense of a business resulting from the reduction in value of assets due to wear and tear.

The straight line depreciation method is one method a business can use to calculate the depreciation expense, and is given by the straight line depreciation formula.

Straight line depreciation = (Cost – Salvage value) / Useful life

Where:
Cost is the original cost of the asset
Salvage value is the estimated value of the asset at the end of its useful life.
Useful life is the estimated working life of the asset in years.

Additional information can be found in our depreciation tutorials.

For further information see the Wikipedia straight line depreciation method definition.

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Last modified July 8th, 2014 by Team

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