Depreciation – Straight Line Method (SLM) | Class 11 Accountancy (Fast Revision) скачать в хорошем качестве

Depreciation – Straight Line Method (SLM) | Class 11 Accountancy (Fast Revision)

Depreciation is the gradual decrease in the value of a fixed asset due to use, passage of time, wear and tear, or obsolescence. Straight Line Method (SLM): Under the Straight Line Method, an equal amount of depreciation is charged every year over the useful life of the asset. Formula: Annual Depreciation=Cost of Asset−Scrap ValueUseful Life of Asset\text{Annual Depreciation} = \frac{\text{Cost of Asset} - \text{Scrap Value}}{\text{Useful Life of Asset}}Annual Depreciation=Useful Life of AssetCost of Asset−Scrap Value​ Features of SLM: Depreciation amount remains constant every year Easy to calculate and understand Suitable for assets whose usefulness remains uniform (e.g., buildings, furniture) Journal Entry: Depreciation A/c Dr. To Asset A/c Advantages: Simple and systematic method Useful for long-term assets Helps in easy comparison of profits Disadvantages: Not suitable for assets with heavy usage in early years Does not consider repair cost increase over time Important Exam Point: 👉 Book value of the asset reduces evenly every year under SLM.