What is the formula for depreciating furniture?


Quick Answer

To depreciate furniture, businesses take the retail cost of the furniture and divide it by its life expectancy in years, according to the Houston Chronicle. Furniture retailing at $500 with a life expectancy of five years, for example, depreciates at a rate of $100 per year.

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Full Answer

The depreciation rate depends on the cost of furniture and the estimated length of its useful life, notes the Houston Chronicle. High-quality furniture and furniture in low-traffic areas of the office have a high life expectancy. Sales representatives can gauge how long furniture stays in use before it needs replacement. Most furniture has an estimated life expectancy of seven years.

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