The document discusses the straight-line depreciation method. It allocates the same amount of depreciation expense each reporting period. To calculate straight-line depreciation, you need the cost, residual value, and useful life of the asset. The formula is Depreciation Expense = (Cost - Residual Value) / Useful Life. An example calculates depreciation expense of $2,400 per year for a van costing $16,000 over 4 years with a residual value of $6,400. The method can also be expressed as a percentage by dividing the annual depreciation expense by the original cost.