Depreciation – Straight Line Method (SLM) | Class 11 Accountancy (Fast Revision)
Автор: Sujeet Singh I Commerce Battleground
Загружено: 2025-12-16
Просмотров: 102
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.
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