Straight Line Basis

AAA

DEFINITION of 'Straight Line Basis'

A method of computing amortization (depreciation) by dividing the difference between an asset's cost and its expected salvage value by the number of years it is expected to be used.

INVESTOPEDIA EXPLAINS 'Straight Line Basis'

Also known as straight line depreciation or straight line amortization, this is the simplest deprecation method. Basically, it just spreads out the cost of an asset equally over its lifetime.

RELATED TERMS
  1. Amortization

    1. The paying off of debt in regular installments over a period ...
  2. Half-Year Convention For Depreciation

    A depreciation schedule that treats all property acquired during ...
  3. Salvage Value

    The estimated value that an asset will realize upon its sale ...
  4. Depreciation

    1. A method of allocating the cost of a tangible asset over its ...
  5. Tangible Personal Property

    An tax term describing personal property that can be physically ...
  6. Expanded Accounting Equation

    The expanded accounting equation is derived from the accounting ...
Related Articles
  1. An Introduction To Depreciation
    Active Trading

    An Introduction To Depreciation

  2. Depreciation: Straight-Line Vs. Double-Declining ...
    Forex Education

    Depreciation: Straight-Line Vs. Double-Declining ...

  3. Material Adverse Effect A Warning Sign ...
    Markets

    Material Adverse Effect A Warning Sign ...

  4. Footnotes: Early Warning Signs For Investors
    Retirement

    Footnotes: Early Warning Signs For Investors

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center