What are the different methods of property depreciation?

What are the different methods of property depreciation?

There are several methods of property depreciation, including straight-line, declining balance, and units of production. Would you like to know more about a specific method?

Can you explain the straight-line method?

Sure! The straight-line method spreads the cost of the property evenly over its useful life. For example, if a property costs $100,000 and has a useful life of 20 years, the annual depreciation would be $5,000.

What about the declining balance method?

The declining balance method allows for higher depreciation in the earlier years of the asset's life. It uses a fixed percentage of the remaining book value each year, which results in decreasing depreciation amounts over time.

Which method is the most commonly used?

The straight-line method is the most commonly used due to its simplicity and ease of calculation. However, the choice of method can depend on the specific financial strategy.