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book value formula using straight line method. Its the simplest and most commonly used depreciation method when calculating this type of expense on an income statement and its the easiest to learn. The straight line calculation as the name suggests is a straight line drop in asset value.
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The depreciation rate is the annual depreciation amount total depreciable cost. To compute for book value four essential parameters are needed and these parameters are present amount or worth P salvage value S total estimated life of the. Net Book Value formula Original Purchase Cost Accumulated Depreciation Original Purchase.
Book value residual value X depreciation rate.
Determine the initial cost of the asset that has been recognized as a fixed asset Subtract the estimated. The depreciation rate is the annual depreciation amount total depreciable cost. To determine straight-line depreciation for the MacBook you have to calculate the following. The straight line method is the simplest and most generally used method of calculating depreciation and is given by the straight line method formula as follows.
