Straight line depreciation is a method to depreciate a tangible asset. In straight line depreciation the asset is depreciated by an equal amount throughout the life of the asset.
Machine A costs Rs 10,000 and has a salvage value of Rs 2000 at the end of 4 years.
According to straight line depreciation, depreciation expense for asset A
Depreciation = Price – Salvage Value
Useful Life in Years
Depreciation = (10,000 – 2000) /4
= 2000 per year