Under the straight-line method of amortization, the premium or discount is prorated in equal dollar amounts to interim periods between the date of purchase and the maturity. The straight-line method of depreciation allocates the cost of a capital asset systematically over the useful life of the asset by way of the following formula: (cost less salvage value) divided by estimated useful life in years. Refer to AMORTIZATION and DEPRECIATION.
A method of depreciation that assumes depreciation depends only on the passage of time and that allocates an equal amount of depreciation to each accounting period in an asset's useful life.
(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
The simplest form of depreciation, in which an equal expense is recorded in each year of an asset's useful life. For example, if the asset has a purchase price of $1,200,000, a useful life of four years and a salvage value of $200,000, straight-line depreciation would record $250,000 of depreciation each year. See also sum of the years' digits and double-declining balance.
A method of depreciation where the deduction is taken in equal amounts each year for the useful life of its asset.
A method of amortizing bond discounts or premiums that allocates the discount or premium equally over each interest period of the life of a bond.
A method of depreciation, also called the age-life method, that is computed by dividing the adjusted basis of a property by the number of years of estimated remaining useful life. The cost of the property is thus deducted in equal annual installments. For example, if the depreciable basis is $ 100,000 and the estimated useful life is 25 years, the annual depreciation deduction is $4,000 for each year during the useful life of the asset. Prior to 1986, taxpayers sometimes used a form of accelerated depreciation such as 175 percent of straight line. The IRS had rules to recapture the amount of depreciation that was in excess of the straight-line rate. (See depreciation)
A method of calculating depreciation for tax purposes, computed by dividing the adjusted basis of a property by the estimated number of years of remaining useful life.