Finance & Interest
Basic

Straight-Line Depreciation

Annual depreciation of an asset.

Formula

D=C−SnD = \frac{C - S}{n}

Variables

CCost
SSalvage value
nUseful life (years)

Example

A $12 000 asset with $2000 salvage over 5 years depreciates (12000−2000)/5 = $2000/year.

Did You Know?

Straight-line depreciation spreads an asset's cost evenly over its useful life for accounting.

depreciationaccounting