For example, after the first year's depreciation is posted, the asset you purchased for $12,000 will have a net book value of $11,000; after five years, the book value will be $7,000.

Book value refers to a company's net proceeds to shareholders if all of its assets were sold at market value. Salvage value is the value of assets sold after accounting for depreciation over its ...

Therefore, the company must subtract the residual value of $5,000 from the $50,000 initial value and divide by the asset's useful life of 10 years to arrive at its yearly depreciation, which is ...

A company may decide to change the depreciation method it applies to a fixed asset. For example, if an asset loses much of its value early on, a company might switch from straight-line to ...