Lesson Plan

• Describe the straight‑line depreciation calculation.
• Explain how depreciation alters the balance sheet through net book value and accumulated depreciation.
• Analyse the effect of depreciation expense on profit before tax, tax expense and net profit.
• Apply the method to a worked example and adjust the financial statements accordingly.

• Projector or interactive whiteboard
• Printed worksheet with depreciation tables
• Calculator or spreadsheet software
• Sample financial statements (balance sheet & income statement)
• Whiteboard markers and flip chart

Begin with a quick poll: “If a machine costs £120,000, how does its value change over time?” Connect this to students’ prior knowledge of asset costing and introduce today’s success criteria – they will be able to calculate straight‑line depreciation and trace its impact on both major financial statements.

1. Do‑now (5'): Students complete a short quiz on asset definitions and residual value.
2. Mini‑lecture (10'): Explain the straight‑line formula and demonstrate the £120,000 machine example.
3. Guided practice (15'): Work through the depreciation tables together, updating the balance sheet and profit‑or‑loss statement.
4. Independent activity (10'): Students calculate depreciation for a new asset on a worksheet and record the effects.
5. Check for understanding (5'): Quick “exit ticket” – write one way depreciation influences the balance sheet and one way it influences profit.

Recap the key points: straight‑line spreads cost evenly, creates a contra‑asset, and reduces profit and tax. Collect exit tickets as a retrieval check and assign homework to complete a full set of financial statements for a different asset using the same method.