Fixed asset depreciation methods explained
Writedown is an early concept in validation; no product exists yet. Nothing below describes a built feature.
Fixed asset depreciation software spreads the cost of an asset over its useful life using a chosen method. These are the methods accounting teams most often compare.
Straight-line
The same expense each period over the asset's useful life, after any salvage value. It is the usual choice for book depreciation because it is simple and predictable.
MACRS
The Modified Accelerated Cost Recovery System is the general method for US federal tax depreciation. Assets are placed in recovery classes with set percentage tables. IRS Publication 946 is the authoritative reference.
Section 179 and bonus depreciation
Section 179 lets eligible businesses expense qualifying asset costs in the year placed in service, within annual limits. Bonus depreciation is a separate first-year deduction. Both rules and limits change, so check current IRS guidance or your tax adviser rather than relying on a fixed figure.
Declining balance and units of production
Declining balance front-loads expense by applying a fixed rate to the remaining book value. Units of production ties expense to usage, such as machine hours.
Book versus tax
Many companies keep one schedule for financial reporting and another for tax. The difference creates deferred tax items that the register has to track, which is where spreadsheets get fragile.
What software would need to handle
Multiple methods per asset, additions, disposals and partial-year conventions, journal entries per period and a change history. Writedown, an early concept, is testing whether this matters enough to accounting teams to build.
This page is general information, not tax advice.