Reviewed by Charlene Rhinehart Fact checked by Vikki Velasquez Businesses depreciate long-term assets for both tax and accounting purposes. For tax purposes, businesses can deduct the cost of the ...

GAAP Declining Balance Method. Companies that comply with generally accounting principles, called GAAP, may opt to use the declining balance method to calculate depreciation on a particular asset ...

The four depreciation methods include straight-line, declining balance, sum-of-the-years' digits, and units of production. Most companies use a single depreciation methodology for all of their assets.

Now, the reducing balance method of depreciation is a method in which the asset is depreciated by a set percentage, as opposed to value, every month.

Variable-declining balance uses the double-declining factor but also initiates the automatic switch to straight-line depreciation once that is greater than double-declining.

Learn how to calculate asset depreciation and amortization using the straight-line basis method. Discover its advantages, ...

Sum-of-the-Years Digits Depreciation Another accelerated method, this approach applies a different rate each year to calculate the asset’s depreciable amount.