straight-line depreciation

Straight-line depreciation

Amortizing or apportioning an equal dollar amount of depreciation in each accounting period.

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Straight-Line Depreciation

A system of depreciation in which one deducts the same amount every year. For example, suppose an asset costs $1,200 with a usable life of three years and a salvage value of $300. If one uses straight-line depreciation, one deducts $300 each year.

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straight-line depreciation

A method of recording depreciation such that the original cost minus the estimated salvage value of an asset is written off in equal amounts during each period of the asset's life. For example, a machine costing $10,000 with an estimated life of five years and no salvage value would be depreciated $2,000 ( ^$10,000/₅ ) annually, using straight-line depreciation. If the machine had an estimated salvage value of $4,000, annual straight-line depreciation would amount to $1,200. Compare accelerated depreciation.

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straight-line depreciation

A method of accounting for the gradual loss in value of an asset over time by predicting that the asset's value will decline in equal amounts each year over a specified number of years.The method is also used for tax purposes as an expense allowed each year for the supposed loss in value of an asset,even though it might actually be increasing in value.See depreciation.

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Straight-Line Depreciation

A method of computing depreciation under which the depreciation deduction is the same for each full year.