Straight-line Method (Noun)
Meaning
(accounting) a method of calculating depreciation by taking an equal amount of the asset's cost as an expense for each year of the asset's useful life.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The company uses the straight-line method to calculate the depreciation of its assets over their useful lives.
- Under the straight-line method, the cost of the equipment will be expensed evenly over 10 years.
- The straight-line method is a simple and widely used method of calculating depreciation for accounting purposes.
- To calculate the annual depreciation of the building, the company applied the straight-line method over its useful life of 50 years.
- Using the straight-line method, the total cost of the asset is divided by its useful life to determine the annual depreciation expense.