Straight-Line depreciation is a method used to reduce the value of an asset, like a car, over time. It spreads the cost evenly across each year until the balance is zero.

If you're not sure which method to use, check with your accountant.

Straight depreciation

The asset's value reduces by a fixed percentage of the cost price every year until it reaches zero.

The Fixed Assets Register calculates Straight depreciation on a monthly basis using the following calculation:

Example

Monthly depreciation = 10,000.00 x (25/100) / 12 = 208.33

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Next steps

You can now post your depreciation either manually or automatically, when you run your month end process.

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• Reducing balance depreciation method