Depreciation: Straight-Line — The Workhorse Method

Straight-line depreciation is the most widely used depreciation method in the business world — and for good reason. It's simple, predictable, and appropriate for a huge range of assets. In this episode, we build the straight-line method from scratch and apply it to BrightLeaf Coffee's espresso machine. We cover: ● How straight-line depreciation works: spreading the depreciable base evenly across the asset's useful life ● The formula: depreciable base ÷ useful life = annual depreciation expense ● Building a complete depreciation schedule for the espresso machine — $700 per year for five years ● The journal entry: debit depreciation expense, credit accumulated depreciation ● Why accumulated depreciation is a contra-asset account — and why we don't just reduce the asset directly ● When straight-line is the right choice — and when it might not be ● Why simplicity and predictability make straight-line the default for most businesses By the end of this video, you'll understand: ● How to calculate straight-line depreciation and build a depreciation schedule ● How the journal entry works and what it does to the income statement and balance sheet ● Why straight-line is the go-to default — and what would lead you to consider something else In the next episode, we'll look at the most common accelerated method: double-declining balance. 👉 Visit us at intellicasts.com to explore more resources and courses.