Depreciation in Numia

Most assets lose their value over time and must be replaced once the end of their useful life is reached. Decrease in value of your asset due to obsolescence or use is termed as Depreciation. It is considered an expense and is listed in an income statement under expenses.

For Instance, consider that you buy a Computer for your organization. The computer loses value from the minute you bought it. Computer is considered as a fixed asset of the organisation. Each year the value of the computer keep on reducing . Measuring the value being reduced is called as depreciation. This depreciation value may vary depending on the type of asset you own.

Depreciation is calculated in two methods namely, Percentage method and Straight-line method. In the former method, a percentage will be fixed according to the type of asset and that percentage of amount will be reduced every year from that asset. In the later method a formula is used to calculate the depreciation value.

Depreciation value = (cost of the asset - expected salvage value)/ Years of estimated useful life

Strainght line method is the most commonly used method. Numia ,our free Online Accounting Software uses both these method for calculating the depreciation value of assets. We provide you an option to select time period like full-year, quarterly and half-year for calculating the depreciating value.


To find the annual depreciation cost for your assets, you need to know the initial cost of the assets. You also need to determine how many years you think the assets will retain some value for your business. In the case of a computer, it may only have a useful life of ten years.