fixed-percentage depreciation

In accounting, depreciation is the process of allocating the cost of an asset over its economic life. The fixed-percentage method is one way to calculate this depreciation.1

Under the fixed-percentage method, a consistent percentage of the asset's cost balance is determined at regular intervals. This balance is progressively reduced by subtracting each prior depreciation amount from the original cost. This results in gradually decreasing depreciation charges over the asset's life. A depreciation charge, often a fixed percentage of the original cost, is periodically expensed to account for the asset's decline in value. This method is a branch of accounting that systematically distributes the cost of a fixed asset over its estimated useful life.2134