Straight-line Method in Depreciation

Straight-line Method in Depreciation

This simple and effective method is much used, and is to be preferred for costing purposes owing to the uniform charge. The life of the machine, or other asset, is estimated; also the residual value. The
cost, less the residual value (plus the cost of fixing, in the case of a new machine), divided by the estimated years of life, determines the annual amount of depreciation to be charged. A separate calculation should be made for each machine.

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