Jan 23, 2020 · Straight-Line Method
Straight-Line Method Example GAAP Depreciation Amount After four years of use, the company realized the asset would be useful for only three more years
Straight line depreciation is a common method of depreciation where the value of a fixed asset is reduced gradually over its useful life
The straight-line method of depreciation assumes a constant rate of depreciation
The name comes from the straight line on the chart that reflects the item’s value
The double declining balance method of depreciation, also known as the 200% declining balance method of depreciation, is a form of accelerated depreciation
The straight-line depreciation method considers assets used and provides the benefit equally to an entity over its useful life so that the depreciation charge is equally annually
Column B of Figure 1 illustrates the use of the SLN function
We calculate yearly depreciation by averaging the difference between the purchase price of an asset at the beginning of its useful life and the salvage value of the asset at the end of its useful life over the useful life of the asset
Each depreciation expense is reported on the income statement for the accounting period, and