Straight Line Depreciation Calculator

What are other popular types of depreciation methods?

Alongside straight line depreciation, there are other methods to calculate depreciation. To reflect the current value of an asset, it is sometimes better to opt for other depreciation methods. Further, a company can decide the way they would want to have depreciation calculated. Two other popular depreciation methods, the double-declining balance method and the unit of production methods, are getting for businesses.
The double-declining way is best for companies that have their assets fall when the market goes up. Units of production method are great where a quantity is associated with the number of kilometers travelled by taxi.

What is straight line depreciation? Give an example?

Straight line depreciation is a method to calculate the value that an asset loses over time till the end of its life span. Using this depreciation method, we estimate a fixed value that remains fixed for every year of depreciation till it reaches its salvation value.
An example of straight line depreciation:
A company purchase one computer for a price of 5,00,000. The salvage value of this computer is 50,000 after it gets used for five years. The company needs to repurchase an asset every fiveyears to maintain confidentiality and upgrade to the latest technological developments.
Now, since the company is going to use the computer for five years, it is better to distribute its cost over five years. It would help in providing a better idea of fees and expenses that occur during a fiscal year.

Depreciation cost = (5,00,000 - 50,000) / 5 = INR 90,000

Further, you can calculate the depreciation rate for the asset:
Depreciation rate = 90,000 / (5,00,000 - 50,000) = 20%

How do you calculate straight line mid-month depreciation?

You can easily calculate the depreciation for a partial month. By using the straight-line depreciation calculator by Vyapar, you can get the fixed monthly depreciation cost of an asset. To get the mid-month depreciation, simply divide the monthly depreciation value by two. The reason is that the straight-line depreciation remains the same for every month.

Is depreciation calculated monthly or yearly?

You can use the Vyapar depreciation calculator to evaluate monthly or yearly depreciation for any asset. Even if you decide to calculate it on a monthly basis, you can easily convert it on an annual basis and vice versa.

Further, you can easily calculate monthly or yearly depreciation by using the depreciation rate. All you need to do is use Vyapar’s depreciation calculator to get a fixed depreciation rate. Once you know the depreciation rate, you can calculate monthly, quarterly, semi-yearly, or yearly depreciation instantly.

Is Straight line depreciation the same every year?

The straight line depreciation value stays fixed for each year. Once you calculate the final depreciation for a year, you can use the same value for the remaining years before the asset reaches its salvage value. Vyapar app can help you keep track of the straight-line depreciation values for your business and use them to help in filing taxes effectively.

How is straight line depreciation different from the various other methods?

There are several types of depreciation, and the most popular among them is straight-line depreciation. The straight-line method is the simplest among all as it reduces the value of any asset every year with an equal amount. On the other hand, in the double-declining method, the depreciation is adjusted so that you have more expense in the earlier years and lesser expense in the later years.

Another popular method used is units of production depreciation, and it works entirely differently. The depreciation cost in units of production method is based on the number of units an asset produces over time. So, if we compare it to the straight-line depreciation method, it has only a few things in common.

When should I use the straight line method?

The straight line method of depreciation is a widely used depreciation method due to its wide area of applications. Go through the list below to better understand where you can use the straight-line method of depreciation.

1. When you are a small business:
A small business does not require heavyweight ways to calculate depreciation. By using a simple method, you can evaluate the depreciation and focus on other areas of your business. Small businesses often use small-sized equipment that does not have a very high cost. So, even if you use a straight-line method, it does not have a heavy impact on your finances.

2. When you want to simplify things:
Complicating things by using a difficult depreciation method can do more harm than good. Not simplifying things could result in unnecessary trouble in the future. So, it is better to use a straight-line depreciation method that anyone can understand with a basic understanding of mathematics.

3. When you want to perform calculations quickly:
You have no time, and your business requires numbers to evaluate correctly. In such cases. You can opt for a straight-line depreciation calculator. It can help you assess how much you can depreciate every year.

How can straight line depreciation factor up into my accounting?

Straight line depreciation can get used in your accounting books by evaluating an assets’ ‘depreciation value over a period of a year. Using the straight-line depreciation calculator in Vyapar, you can determine the depreciation values and get them stored for each asset in your inventory. Further, you can use this data while filing taxes using Vyapar. It will help you save time from reentering all financial values in a year.