There are several assumptions required for developing depreciation schedules. There are five primary methods of depreciation financial accountants can choose from: straight-line, declining balance, double-declining balance, sum-of-years digits, and units of production. The declining balance, double-declining balance, and sum of years digits methods are accelerated depreciation methods with higher depreciation expense upfront in earlier years. |
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Straight-Line Depreciation
| Straight line depreciation is generally the most basic depreciation method. It includes equal depreciation expenses each year throughout the entire useful life until the entire asset is depreciated to its salvage value. |
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Overview
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