What Is straight line depreciation?

In financial accounting we have different types of depreciation, based on the company's accounting policy. One of the methods is straight line depreciation. 

Assets can be depreciated, so losing thier value in a certain time period. Let say you bought a computer for £1000 in 2015, it is not going to worth £1000 in 2020 is it? We have to calculate this amout. So, let's say a company bought a computer in 2010 for £1000 and the company's policy suggests to use straight line method. The computer will totally depreciate in 10 years. Using this method it means that every year that computer will worth less £100. How much does the computer worth in 2016? 

It will worth 1000 (cost) - 600 (depreciation) = 400 

The equation is for a year =((cost-salvage value)/useful life), in that case (1000-0)/10=100 

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Answered by Ignac S. Accounting tutor

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