straight-line method (Meaning)
straight-line method (n)
(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
Synonyms & Antonyms of straight-line method
No Synonyms and anytonyms found
straight-line method Sentence Examples
- The straight-line method of depreciation allocates the cost of an asset evenly over its estimated useful life.
- Using the straight-line method, the annual depreciation expense for a five-year asset would be one-fifth of its cost.
- The straight-line method of amortization is commonly used to allocate the cost of intangible assets over their useful lives.
- The straight-line method is simple to apply and does not require any estimates of future cash flows.
- Although the straight-line method is the most straightforward, it does not always reflect the actual pattern of asset usage.
- The straight-line method can result in an overstatement of depreciation expense in the early years of an asset's life.
- For assets with a salvage value, the straight-line method includes the salvage value in the calculation of the annual depreciation expense.
- The straight-line method assumes that the asset's value decreases at a constant rate over its useful life.
- The straight-line method is not always the most appropriate method of depreciation, as it does not take into account the time value of money.
- The straight-line method is often used in conjunction with other methods of depreciation, such as the double-declining balance method.
FAQs About the word straight-line method
(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
No synonyms found.
No antonyms found.
The straight-line method of depreciation allocates the cost of an asset evenly over its estimated useful life.
Using the straight-line method, the annual depreciation expense for a five-year asset would be one-fifth of its cost.
The straight-line method of amortization is commonly used to allocate the cost of intangible assets over their useful lives.
The straight-line method is simple to apply and does not require any estimates of future cash flows.
