oboloo Glossary

Accounting Straight Line Method

oboloo Glossary

Accounting Straight Line Method

The Accounting Straight Line Method is an approach to expense recognition that seeks to spread costs over the life of a fixed asset. Using this method, businesses amortize the cost of a purchase over its useful life. This helps reflect the actual use and value of an asset by recognizing all related expenses gradually, instead of in large chunks. By using this method, businesses can secure more accurate financial statements and better represent their true profitability. It’s important to note that the length of the amortization period should match the lifespan of the asset – ensuring its numbers are as precise as possible.