The Yearly Depreciation Formula is a mathematical calculation used to determine the depreciation of an asset over a 12-month span. This formula helps companies accurately identify their assets’ value and associated expenses. It works by taking the cost of the asset in its original state, subtracting the estimated salvage value, and dividing that number by the useful life of the asset—while also accounting for any applicable percentages. Businesses use this equation to calculate their yearly depreciation rates, which can be applied when filing taxes or creating balance sheets. By using the Yearly Depreciation Formula, businesses are able to get an accurate picture of their finances and better understand how to adjust their operations accordingly.