The simplest and most commonly used straight line depreciation is calculated by taking the purchase or acquisition price of an asset subtracted by the salvage value divided by the total productive years the asset can be reasonably expected to benefit the company called useful life in accounting jargon. Since the 200 Declining Balance Method is used we can divide 200 by the life in years to obtain the annual depreciation rate. The formula for annual depreciation under straight line method is as follows.
Diminishing balance or Written down value or Reducing balance Method.
The simplest and most commonly used straight line depreciation is calculated by taking the purchase or acquisition price of an asset subtracted by the salvage value divided by the total productive years the asset can be reasonably expected to benefit the company called useful life in accounting jargon. Since the 200 Declining Balance Method is used we can divide 200 by the life in years to obtain the annual depreciation rate. It is the initial book value of the asset. The formula for annual depreciation under straight line method is as follows.