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By Corporate Finance Institute
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Get instant insights and key takeaways from this YouTube video by Corporate Finance Institute.
Depreciation Calculation Methods
š The three most common depreciation methods are straight-line, double declining balance, and units of production.
š The straight-line method expenses an equal amount of depreciation every year over the asset's useful life.
š The formula for straight-line depreciation is: .
Accelerated Depreciation (Double Declining Balance)
ā” The double declining balance method is an accelerated depreciation approach, resulting in greater depreciation expense in the early years.
š This method requires building a detailed depreciation schedule and can be beneficial for companies looking to lower their tax bill early on by increasing depreciation expense, thereby reducing taxable income.
āļø The calculation involves taking multiplied by the beginning period book value of the asset.
Units of Production Method
š The depreciation expense under the units of production method varies each year and is directly tied to the actual output the asset produces.
šÆ This method is ideal for companies that wish to match actual business output to the depreciation expense incurred.
ā To calculate, take the , and multiply this percentage by .
Key Points & Insights
ā”ļø Companies can choose different methods based on their financial goals, such as maximizing early tax deductions using double declining balance.
ā”ļø The straight-line method provides predictable, equal annual expense calculations.
ā”ļø The units of production method aligns expense recognition directly with asset utilization and output volume.
šø Video summarized with SummaryTube.com on Nov 26, 2025, 11:01 UTC
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Full video URL: youtube.com/watch?v=LEuT3EBn0g4
Duration: 5:42
Get instant insights and key takeaways from this YouTube video by Corporate Finance Institute.
Depreciation Calculation Methods
š The three most common depreciation methods are straight-line, double declining balance, and units of production.
š The straight-line method expenses an equal amount of depreciation every year over the asset's useful life.
š The formula for straight-line depreciation is: .
Accelerated Depreciation (Double Declining Balance)
ā” The double declining balance method is an accelerated depreciation approach, resulting in greater depreciation expense in the early years.
š This method requires building a detailed depreciation schedule and can be beneficial for companies looking to lower their tax bill early on by increasing depreciation expense, thereby reducing taxable income.
āļø The calculation involves taking multiplied by the beginning period book value of the asset.
Units of Production Method
š The depreciation expense under the units of production method varies each year and is directly tied to the actual output the asset produces.
šÆ This method is ideal for companies that wish to match actual business output to the depreciation expense incurred.
ā To calculate, take the , and multiply this percentage by .
Key Points & Insights
ā”ļø Companies can choose different methods based on their financial goals, such as maximizing early tax deductions using double declining balance.
ā”ļø The straight-line method provides predictable, equal annual expense calculations.
ā”ļø The units of production method aligns expense recognition directly with asset utilization and output volume.
šø Video summarized with SummaryTube.com on Nov 26, 2025, 11:01 UTC
Find relevant products on Amazon related to this video
As an Amazon Associate, we earn from qualifying purchases

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