![]() Subtract the estimated salvage value of the asset from its initial cost – this will give you the depreciable asset cost.Calculate the estimated useful life of the asset – this is how many years the asset is expected to remain functional and fit-for-purpose.Work out the initial purchase price or acquisition cost of the fixed asset.How to calculate straight-line depreciation Whilst there are several other depreciation methods, the straight-line approach is the easiest to understand and is suitable for the needs of small businesses and freelancers. The straight-line method is the most straightforward approach to calculating depreciation or amortisation. As such, the depreciation expense recorded on an income statement is the same each year. Under the straight-line method of depreciation, the cost of a fixed asset is spread evenly for each year that it is useful, functional and profitable. ![]() ![]() Straight-line depreciation is a method of calculating depreciation whereby an asset is expensed consistently throughout its useful life.ĭebitoor invoicing software automatically applies straight-line depreciation to your fixed assets, making it easier than ever to manage business expenses. Straight-line depreciation – What is straight-line depreciation? ![]()
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