Depreciation

Straight Line Method: This method assumes that depreciation is a function of time rather than use. Diminishing Balance Method: Under this method, a fixed percentage is applied to book value of the assets (cost of assets). Unit of Production Method: Annuity Method: Sinking Fund Method:

Straight Line Depreciation Method. Diminishing Balance Method. Sum of Years' Digits Method. Double Declining Balance Method. Sinking Fund Method. Annuity Method. Insurance Policy Method. Discounted Cash Flow Method.

The straight-line method is the simplest and most commonly used way to calculate depreciation under generally accepted accounting principles. Subtract the salvage value from the asset's purchase price, then divide that figure by the projected useful life of the asset.

In this way, you can see at a glance exactly how much depreciation you've claimed for that asset over the years, and you'll know when the asset is fully depreciated so that no more deductions can be claimed.

Straight-Line Depreciation. Declining Balance Depreciation. Sum-of-the-Years' Digits Depreciation. Units of Production Depreciation.

Depreciation is an accounting method of allocating the cost of a tangible or physical asset over its useful life or life expectancy. Depreciation represents how much of an asset's value has been used up.

Subtract the asset's salvage value from its cost to determine the amount that can be depreciated. Divide this amount by the number of years in the asset's useful lifespan. Divide by 12 to tell you the monthly depreciation for the asset.

5-year property automobiles, computers. 7-year property office furniture, agricultural machinery. 10-year property boats, fruit trees. 15-year property restaurants, gas stations.