Straight-Line Depreciation

[streɪt laɪn dɪˌpriːʃiˈeɪʃən]

What is the definition of Straight-Line Depreciation?

An accounting method that allocates the cost of an asset evenly across its useful life, reflecting equal wear and tear during each accounting period.

Using Straight-Line Depreciation in an Example

If a company purchases a piece of equipment for $10,000 and expects it to have a useful life of 10 years with no salvage value, the straight-line depreciation expense would be $1,000 per year for 10 years.

Using Straight-Line Depreciation in a sentence

During the financial review, the CFO explained that they use straight-line depreciation for all their office furniture to simplify the accounting process.

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