# Depreciation

Written by Jerry Ratzlaff on . Posted in Manufacturing Engineering

Depreciation, abbreviated as Dep, is the process of deducting the cost of a business asset over a long perion of time.

## Depreciation - Straight-Line Method Formula

 $$\large{ Dep = \frac{ AC \;-\; RV }{ ULA } }$$

### Where:

$$\large{ Dep }$$ = depreciation

$$\large{ AC }$$ = asset cost

$$\large{ RV }$$ = residual value

$$\large{ ULA }$$ = useful life of asset

## Depreciation - Unit of Production Method Formula

 $$\large{ Dep = \frac{ AC \;-\; RV }{ ULA } \; UP }$$

### Where:

$$\large{ Dep }$$ = depreciation

$$\large{ AC }$$ = asset cost

$$\large{ RV }$$ = residual value

$$\large{ LTP }$$ = life-time production

$$\large{ UP }$$ = units produced

## Depreciation - Double Declining Balance Method Formula

 $$\large{ Dep = \frac{ AC \;-\; AD }{ ULA } }$$

### Where:

$$\large{ Dep }$$ = depreciation

$$\large{ AC }$$ = asset cost

$$\large{ AD }$$ = accumulated depreciation

$$\large{ ULA }$$ = useful life of asset