# Depreciations0

## 1. Creating a Depreciation Record

Click Depreciations from the left menu to open the following view:

On the depreciations page, you'll find four columns that show depreciation info:

• Cost: Purchase cost of this asset.
• Current Value: Residual value of an asset.
• Monthly Depreciation: Depreciation value for the current month.
• Remaining: Depreciation value of all months from the started using date until now (The started using date is the purchase date).

The system calculates depreciation using the Straight-Line Depreciation Method.
Straight-line depreciation is a very common, and the simplest, method of calculating depreciation expense. In straight-line depreciation, the expense amount is the same every year over the useful life of a given asset.

The depreciation Formula for the Straight Line Method is:

[(Cost – Salvage value) / Number of months]

Salvage value default is 0

## 2. Straight-Line Depreciation Calculation Example:

Consider a piece of equipment that costs \$25,000. The number of months that it has been used for up to this point is 8 years and the salvage value is \$0. The year-to-year depreciation expense for this equipment would be as follows:

Depreciation Expense = (\$25,000 – \$0) / 8 = \$3,125 per year.

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