ECONOMICS

Detailed explanation-1: -How do you calculate straight-line depreciation? Straight-line depreciation is calculated by dividing a fixed asset’s depreciable base by its useful life. The depreciable base is the difference between an asset’s all-in costs and the estimated salvage value at the end of its useful life.

Detailed explanation-2: -Straight‐line depreciation is an example of a fixed cost. It does not matter whether the machine is used to produce 1, 000 units or 10, 000, 000 units in a month, the depreciation expense is the same because it is based on the number of years the machine will be in service.

Detailed explanation-3: -To calculate the depreciation of property, you have to consider two factors-the total useful age of the structure and the number of years after construction. The formula used to calculate depreciation of property is the number of years after construction divided by the total useful age of the structure.

Detailed explanation-4: -Buildings – 10% Depreciation Rate All types of buildings with are not used for residential purposes can be charged with a 10% depreciation rate. A building would be deemed to be a building used mainly for residential purposes if the built-up floor area used for residential purposes is not less than 66.66%.

Detailed explanation-5: -Straight-line depreciation is the simplest method for calculating depreciation over time. Under this method, the same amount of depreciation is deducted from the value of an asset for every year of its useful life.