Financial Dictionary
straight-line depreciation
- A method of recording depreciation such that the original cost minus the estimated salvage value of an asset is written off in equal amounts during each period of the asset's life. For example, a machine costing $10,000 with an estimated life of five years and no salvage value would be depreciated $2,000 ($10,000/5) annually, using straight-line depreciation. If the machine had an estimated salvage value of $4,000, annual straight-line depreciation would amount to $1,200. Compare accelerated depreciation.
