Straight-line depreciation
A method of depreciating the ROU asset by an equal charge each period over the useful life.
Definition
Straight-line depreciation divides the initial cost of the right-of-use asset by the number of periods in the depreciation period (the shorter of the lease term and the useful economic life). The same charge is recognised each period. This is the standard method for ROU asset depreciation under IFRS 16 and amended FRS 102.
Why it matters
Because depreciation is straight-line but interest is front-loaded, the total P&L charge for a lease is higher in earlier years. This reverses later in the lease term.
In AuditLease
AuditLease applies straight-line depreciation in all ROU asset depreciation schedules.
Related terms
Put this into practice with AuditLease
AuditLease handles IFRS 16 and FRS 102 lease calculations, statutory note generation, journal entries, and audit evidence — so your team spends less time on spreadsheets and more time on judgements.
This definition is for general information only and is not accounting or legal advice. Definitions are based on IFRS 16, FRS 102, and associated guidance published by the IFRS Foundation and the Financial Reporting Council. Users should refer to the applicable accounting standards and their professional advisers for judgement-specific matters.