In the Straight Line Method of Depreciation do you start taking off the asset or do you divide the asset?
In the Straight Line Method of Depreciation do start dividing the asset or do you take off the asset?
- Spock (rhp)Lv 73 months ago
the usual method is to calculate [separately] the portion of the asset cost that is to be depreciated [estimated salvage needs to be deducted from the cost] and then ]still on paper] divide the portion to be depreciated by the estimated useful like. the result is the annual depreciation expense.
In special circumstances, this method may be modified .... and this need not concern you in the present class.Source(s): retired CPA
- EvaLv 73 months ago
What do you mean by "take off" the asset? (asset - salvage value) / useful life = depreciation per year. The first year may only be a partial year and you would have to calculate that from the number of months it was in service. The transaction is posted to the books as a credit to Accumulated Depreciation and a debit to Depreciation Expense.