Straight Line Depreciation Formula

Straight Line Depreciation Formula

Straight-line method depreciation is calculated by dividing depreciable amount with useful life.

Straight Line Depreciation = Depreciable Amount

                                                Useful life

Example

Cost =20,000

Residual value = 5000

Useful life= 3 Years

What would be Straight line Depreciation?

Solution

Depreciable Amount = cost – Residual Value

= 20,000-5,000

=15,000

Straight Line Depreciation = Depreciable Amount

                                                   Useful life

= 15,000/3

=5,000 (Straight Line Depreciation)

Straight line depreciation is regarded as simplest depreciation method.