ABSTRACT
The figure opposite shows the ‘straight line’ of the falling net book value year by year, and the ‘straight line’ annual charge. Using the straight line basis, annual depreciation can always be expressed as a constant percentage of original cost. (If there is any residual value, this is not the same as 1/n x cost, where n is the useful life.)
(b) Usage (machine hour) method Under the usage method, depreciation for a period is based on usage (for instance, the total number of hours a machine works).
