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Definition
Straight-line depreciation charges the same amount each year: (cost − residual value) ÷ useful life. A £22,000 machine with a £2,000 residual over ten years depreciates £2,000 a year.
In plain terms
It is the even, boring, reliable method — easy to forecast and the default for most equipment. Reducing-balance depreciation front-loads the cost instead.
Why it matters for your company
The method you choose shapes your reported profit profile year to year. Straight-line keeps it smooth. See the full depreciation schedule and depreciation methods.
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Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.