Depreciation is the reduction or the decrease in the value of fixed assets due to the normal wear and tear efflux of time and obsolescence of technology. Depreciation Depreciation refers to when the value of something goes down over time. The value of a car is usually decreases in value with time.
In straight-line depreciation the expense amount is the same every year over the useful life of the asset.
1useful life of asset 10 Depreciation period Double Decline Method. Essentially a MACRS depreciation schedule will begin with a declining balance method then switch to a straight line schedule to finish the schedule. The Mathematics of MACRS Depreciation The standard method of depreciation for federal income tax purposes is called the Modified Accelerated Cost Recovery System or MACRS. A quick example of how it works.