Straight Line Depreciation Method

As for now, Codejig ERP uses only one method of depreciation accrual
  • Straight line
The most commonly used, due to its simplicity, depreciation method is the method of a straight line depreciation. It is based on assumption that asset loses its initial value in equal parts each month during its estimated useful life, e.g. cost of production is distributed evenly throughout the useful life.


By the general rule, the method is calculated through the following steps:

1) initial value and expected salvage value of the asset are defined;

2) salvage value is subtracted from the initial value;

3) result of the subtraction is divided by the duration of the useful life of the asset (Codejig ERP uses months).


The received result will be the cost of depreciation for the asset for one month.


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