Which depreciation method deducts the same amount each year throughout the recovery period?

The straight-line method is the approach that deducts the same amount each year throughout the asset's recovery period. This method distributes the asset's cost evenly across its useful life, making it simple to calculate and predictable for financial planning. To derive the annual depreciation expense, you would subtract the asset's salvage value (the estimated residual value at the end of its useful life) from its initial cost and then divide that amount by the number of years the asset is expected to be in use.

This method is often favored for its simplicity and consistency, allowing businesses to easily forecast their expenses related to asset depreciation. In contrast, other methods such as accelerated depreciation or declining balance lead to varying deduction amounts each year, which can complicate financial projections and analyses. The straight-line method's straightforward calculation is particularly beneficial for businesses looking for ease and stability in their financial reports and tax filings.