Accounting · Lesson Plan
Depreciation
A company’s equipment, vehicles, and buildings wear out over time — and accounting has to reflect that. This lesson defines fixed assets and useful life, explains depreciation as the decline in a fixed asset’s value over its useful life (and why land is the exception), and teaches how to calculate and record depreciation. Students work through depreciation calculations on a worksheet.
For Teachers
Lesson at a glance
- Topic
- Accounting
- Grade Level
- Grades 11–12 / College
- Resource Type
- Lesson + Worksheet
- Estimated Time
- 45–60 minutes
- Format
- Lesson + worked example
- Materials
- Printable lesson, worksheet, pencils
What Students Learn
Learning objectives
- Define fixed assets and useful life
- Explain what depreciation is and why it matters
- Identify why land does not depreciate
- Calculate depreciation for a fixed asset
- Record depreciation in the accounts
Materials
What you’ll need
- Printed lesson and worksheet (one per student)
- Calculator
- Pencils
Key Terms
Vocabulary
- Fixed asset
- Something a company owns that is expected to last more than a year.
- Useful life
- How long a fixed asset is expected to be usable.
- Depreciation
- The decline in a fixed asset’s value over its useful life.
- Salvage value
- A fixed asset’s estimated worth at the end of its useful life.
- Straight-line
- A method that depreciates an asset equally each year.
- Book value
- An asset’s cost minus accumulated depreciation.
For Teachers
Lesson plan
Estimated time: one 45–60 minute class period.
Lesson sequence
- Fixed assets & useful life (12 min). What counts as a fixed asset and why it wears out.
- What is depreciation? (12 min). The decline in value over useful life; why land is the exception.
- Calculate it (13 min). Work a straight-line depreciation example.
- Worksheet (13 min). Students calculate depreciation and book value for sample assets.
Assessment
Assess the worksheet for correct depreciation and book-value calculations.
Discussion
Discussion questions
- What is a fixed asset? Give three examples.
- What does it mean for an asset to have a useful life?
- What is depreciation?
- Why doesn’t land depreciate?
- How would you calculate straight-line depreciation?
Printable Lesson & Worksheet
Depreciation — Lesson & Worksheet
A printable accounting lesson and worksheet on depreciation: fixed assets, useful life, and calculating straight-line depreciation and book value.
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