Describe the straight-line method of depreciation.

The straight-line method of depreciation is a systematic approach to allocating the cost of an asset evenly across its useful life. This means that each year, a consistent amount of the asset's cost is deducted from the company's income as an expense. The underlying principle is to reflect the wear and tear on the asset as it is used over time, allowing businesses to match the depreciation expense with the revenues generated from using the asset.

This method is straightforward and easy to calculate, making it a popular choice among companies. The formula generally used is:

Annual Depreciation Expense = (Cost of the Asset - Residual Value) / Useful Life of the Asset.

Here, the residual value is the estimated value of the asset at the end of its useful life, and the useful life is the period over which the asset is expected to be used.

In contrast, other methods focus on different aspects of asset valuation. For instance, methods that accelerate depreciation based on usage or percentages do not distribute the expense evenly and may take more detailed usage data into account. Therefore, the straight-line method is particularly valued for its simplicity and consistency in accounting practices.