Straight-line Depreciation
Definition of "Straight-line depreciation"
The depreciation method where an equal amount of depreciation expense is allocated to each full period of the asset's useful life. The amount of depreciation is computed as follows; Annual depreciation = (Original costs -Salvage value)/ Useful life. For example, assume that the building costs $800,000 and has an estimated useful life of 20 years. The estimated salvage value at the end of the 5-year period is $200,000. Then the straight-line depreciation per year is ($800,000 - $200,000)/20 years= $30,000/year.
Popular Real Estate Terms
Examining and testing the ground to determine the conditions for building something, such as an office building. ...
A mortgage where the payments are overdue and open to a foreclosure action at any time. A mortgage not having a prepayment clause permitting the mortgagor to repay the mortgage at any ...
(1) Short-term loan that is made in anticipation of permanent longer term loans. The interest rate on such a loan is usually higher than on longer term loans. (2) A business loan in which ...
Zoning a portion of land in a given area for different purposes than its surrounding functions. For example, a locality may decide to spot zone a vacant lot in a residential area for ...
Apartment building in which each resident owns a percentage share of the corporation that owns the building. ...
One of series of parallel beams directly supporting a floor or a roof. Joists can be made out of wood, steel or steel reinforced concrete. Joists are in turn supported by other beams or ...
A provision that allows a mortgage recorded at a later date to take preference over an existing mortgage. ...
Federal agency providing home financing to qualified people in low-income, rural areas. ...
Statutes stipulating that the property of deceased individuals is distributed in a way that assumes that property during marriage is jointly owned and equally shared by the spouses ...
Have a question or comment?
We're here to help.