Depreciation Methods and Formulas

Straight Line Method

spread out evenly

150% Declining Balance

(1/Recovery Period) X 1.5

200% Declining Balance

(1/Recovery Period) X 2

Declining Balance Method

A common depreciation-calculation system that involves applying the depreciation rate against the non-depreciated balance. Instead of spreading the cost of the asset evenly over its life, this system expenses the asset at a constant rate, which results in declining depreciation charges each successive period.

Double Declining Balance Depreciation Method

Depreciation for a period = 2 x straight line depreciation percent * [(book value at beginning of period-salvage value)-accumulated depreciation)].

Sum of the Years' Digits Method

assets are generally more productive when they are new and their productivity decreases as they become old. Sum of the Years' Digits = n(n+1) / 2 where n is the useful life of the asset in years.