Depreciation Methods for Property, Plant, and Equipment (PPE)

Straight-Line Method

The straight-line method associates the long-lived asset’s usefulness with its age.

Straight-Line Expense = (Cost – Salvage Value)/n

where n = number of years in asset’s useful life

Accelerated Methods of Depreciation

Accelerated methods of depreciation include:

  • Sum-of-the-Years Digits (SYD) expensing.
  • Double Declining Balance (DDB) expensing.

SYD Method

SYD method treats an asset as more useful in its early life by raising the depreciation expense for the early years.

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