Depreciation methods

Brief overview of the different types of depreciation available in fixed assets in Xero.

No depreciation

Asset is not depreciated.

Straight line

Straight line depreciation is calculated evenly throughout the useful life of the fixed asset. Also called Straight Line Reducing Balance.

How Xero calculates straight line depreciation

Reducing balance

Reducing balance depreciation reduces the book value of an asset at a higher rate in the earlier years it is owned.

How Xero calculates reducing balance depreciation

Full depreciation on purchase

Immediately expenses the full cost of the asset. This is also known as an immediate write-off.