ocr: Straight Line Depreciation Straight-line depreciation works as follows: Depreciation Fixed Asset Opening B/S Depreciation Expense for Closing B/S Value Rate the Year Value Premises 185,000 - - 7,400 177,600 Plant and 0 0 Machinery 80,000 20% 16,000 64,000 Total E23,400 241,600 You can see how the effect of charging depreciation expense over time to successive accounting periods will be to charge the initial cost of the assets to those tuture periods which receive some benefit from the use of the assets. Hence we are complying with the matching convention. The Company Van
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