straight-line depreciation method - Investment & Finance Definition
A depreciation method where the depreciable cost of the asset is spread evenly over the estimated useful life of the asset. The logic for this method of depreciation comes from the assumption that an asset’s depreciation is caused by the passage of time. To calculate the amount of depreciation that should be charged against the asset each year, the cost of the asset, minus its salvage value, is divided by the estimated life of the asset. The resulting amount is the amount of depreciation that should be deducted from the value of the asset each year. See also double-declining balance method of depreciation and sum-of-the years’ digit depreciation method.