⚙️ Depreciation Dynamo

Equip yourself with the tools of fixed-asset accounting! Calculate periodic depreciation and book values using Straight-Line, Units-of-Production, and Double-Declining Balance.

Lesson: Depreciation Methods & Rules

Depreciation is the systematic allocation of an asset's cost to expense over its useful life—it is cost allocation, not asset valuation!

Method	Formula	Crucial Rule
Straight-Line	$\frac{\text{Cost} - \text{Salvage}}{\text{Useful Life (Years)}}$	Equal expense recognized every full year.
Units of Production	$\frac{\text{Cost} - \text{Salvage}}{\text{Total Estimated Units}} \times \text{Units This Year}$	Tied directly to physical machine usage, mileage, or output.
Double-Declining Balance (DDB)	$\text{Beginning Book Value} \times \left(\frac{2}{\text{Useful Life}}\right)$	Ignore salvage value initially! Never depreciate below salvage value.
Book Value	$\text{Cost} - \text{Accumulated Depreciation}$	Accumulated Depreciation is a Balance Sheet Contra-Asset.

⚙️ Depreciation Dynamo

Asset Schedule Reconciled!

Lesson: Depreciation Methods & Rules