Straight-Line Depreciation
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Units of Production (UOP) is a depreciation method where expense is based on actual use rather than time. Assets like machinery, vehicles, or printing presses depreciate proportionally to the output they produce. More use = more depreciation.
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Pro Tip
UOP gives the most accurate picture of asset consumption for high-use/low-use scenarios. A delivery truck driven 50,000 miles one year and 10,000 miles the next should depreciate proportionally — not equally each year.
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Did You Know?
Oil and gas companies use a similar concept called 'depletion' — the reserve is depleted as oil is extracted. An oil field valued at $10M with 1 million barrels might deduct $10/barrel in depletion expense as oil is pumped out.
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