straight-line depreciation

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Straight-line depreciation

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

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.

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.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Straight-Line Depreciation

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

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@ straight line depreciation = $11,285,000 Total depreciation using Straight-line method = $12,135,000 Discount rate = 5% Tax rate = 35% Cumulative present value of tax savings using cost segregation technique at 5% = $133,563

Cost segregation applied: a taxpayer can substantially increase cash flow by segregating property costs

Here, an impairment loss would be recognized only in the situation where the straight line depreciation method is used, since that is the only situation where the carrying value exceeds the sum of future cash flows.

Living with SFAS 121: how to avoid (or record) an asset writedown

"levered obsolescence measure": the simple percentage underutilization multiplied by the degree of operating leverage (DOL) times the replacement cost new less straight line depreciation or RCNSLD.

Appraising Industrial Special-Purpose Properties

If FIFO inventory and straight line depreciation were used in one year and LIFO inventory and accelerated depreciation were used in the subsequent year, the financial statements would not be comparable unless the changes were properly disclosed.

What's it all about?

Wolf said under the old tax laws, to the extent an owner took straight line depreciation on their real estate, all of the gain was taxed at the favorable capital gains tax rate which was 28 percent.

Feds drop capital gains tax

* Straight line depreciation. Depreciation methods available under ADS: * 150% declining balance, with

* Straight line depreciation. Recovery periods available under GDS: * Autos, trucks, computers,

Depreciation computations made easy

For example, taxes can be reduced in the initial years by using modified ACRS depreciation rather than straight line depreciation for tangible assets.

Tax strategies for corporations

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