Straight Line Depreciation Template
Straight-Line Depreciation Template
This straight-line depreciation template demonstrates how to calculate depreciation expense using the straight-line depreciation method.
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With the straight-line depreciation method, the value of an asset is reduced uniformly over each period until it reaches its salvage value. Straight-line depreciation is the most commonly used and straightforward depreciation method for allocating the cost of an asset. It is calculated by dividing the cost by the useful life of the asset.
Formula for Straight Line Depreciation
The formula for straight-line depreciation is as follows:
Annual Depreciation Expense = (Cost of the Asset − Salvage Value) / Useful Life of the Asset
Where:
Cost of the asset is the purchase price of the asset
Salvage value is the value of the asset at the end of its useful life
Useful life of the asset represents the number of periods in which the asset is expected to be used by the company
Additionally, the straight-line depreciation rate can be calculated as follows:
Straight Line Depreciation Rate = Annual Depreciation Expense / (Cost of the Asset − Salvage Value)
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Additional Resources
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Analyst Certification FMVA® Program
CFI is a global provider of financial modeling courses and of the FMVA Certification. CFI’s mission is to help all professionals improve their technical skills. If you are a student or looking for a career change, the CFI website has many free resources to help you jumpstart your Career in Finance. If you are seeking to improve your technical skills, check out some of our most popular courses. Below are some additional resources for you to further explore:
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In order to become a great financial analyst, here are some more questions and answers for you to discover:
- What is Financial Modeling?
- How Do You Build a DCF Model?
- What is Sensitivity Analysis?
- How Do You Value a Business?
Excel Tutorial
CFI is a global provider of financial modeling courses and of the FMVA Certification. CFI’s mission is to help all professionals improve their technical skills. If you are a student or looking for a career change, the CFI website has many free resources to help you jumpstart your Career in Finance. If you are seeking to improve your technical skills, check out some of our most popular courses. Below are some additional resources for you to further explore:
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CFI is a global provider of financial modeling courses and of the FMVA Certification. CFI’s mission is to help all professionals improve their technical skills. If you are a student or looking for a career change, the CFI website has many free resources to help you jumpstart your Career in Finance. If you are seeking to improve your technical skills, check out some of our most popular courses. Below are some additional resources for you to further explore:
The Financial Modeling Certification
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