Final answer:
Depreciation is generally calculated based on the asset's useful life, using methods like straight-line, declining balance, or sum-of-the-years' digits, depending on the asset's usage pattern.
Step-by-step explanation:
Unless otherwise stipulated, depreciation is normally computed on the basis of the useful life of an asset. Depreciation is a systematic allocation of the cost of a tangible asset over its useful life. Methods to calculate depreciation include straight-line, declining balance, and sum-of-the-years' digits, among others. The choice of method usually depends on the nature of the asset and its expected pattern of economic benefit to the business.