Advantages Of Straight Line Method Of Depreciation

Major benefits or advantages of straight line method of providing depreciation can be expressed as follows:

1. Simple And Easy

Straight line method is simple to understand and it is a widespread method of provision of depreciation. Actual amount of depreciation can be calculated easily and quickly.

2. Uniformity

Another benefits of straight line method is uniformity in depreciation amount. This method charges fixed amount of depreciation every year. So, it distributes depreciation uniformly till the life of the item. 

3. Applicable

Straight line method of depreciation is applicable for all types of long-term assets or properties. 

4. Suitable For Small Business

This method of depreciation is very suitable for small and medium size firms because it is simple and quick to compute. It does not need specific knowledge to practice straight line method.

5. Suitable For Lessor Value Assets

This method is suitable especially for less expensive assets such as furniture and fixture.

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6. Written Off Completely 

Under this method, value of asset can be written off to zero at the expiry of its life. Book value of the depreciated asset will be equal to zero at the end of its commercial life.

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7. Helps To Compare Profit

Straight line method charges equal amount of depreciation each year. So, it helps to compare profits of different accounting years. 

8. Easy To Determine Total Depreciation Charged

In straight line method, depreciation amount remains the same in each year. So, it is easy to calculate the total amount of depreciation charged by using this formula:

Total depreciation charged = Annual depreciation amount X Number of years