Question

How to calculate depreciation on fixed assets?

Answer 1

Depreciation can be calculated by various methods but the most preferred method is the straight-line method. The calculation of depreciation under this method is as follows:

• The determination of the total amount to depreciate can be made from subtracting the salvage value from the cost of the asset.

• The amount is divided by the useful life in years of the asset.

• The depreciation amount can be further divided by 12 months to determine the cost of depreciation to be charged monthly.

Also see:

• What Are Current Assets?
• Fixed Assets Vs Current Assets