Accounting Dictionary - Letter S

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Sum-of-the-years-digits depreciation
applies a decreasing rate to the depreciable cost (i.e., cost less salvage value) and produces a decreasing depreciation expense over the asset useful life. The decreasing rate equals the fraction of a current year's digit to the total of all year digits in the asset useful life. For example, if an asset has a 5-year useful life, depreciation for the first year can be calculated by multiplying the asset depreciable cost by 5 and dividing the result by 15 (i.e., 1 + 2 + 3 + 4 + 5).
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