Straight line or reducing balance for practice equipment

Choosing straight-line or reducing-balance depreciation for a practice's medical equipment, and how the monthly charge reaches the books in Achekam.

By Achekam · 11 October 2026 · 4 min read · For Healthcare businesses in South Africa, Nigeria, Kenya

The new dental chair is installed, the ultrasound machine has been delivered, and the old autoclave has finally been replaced. Each was a large cheque. None of it should hit the income statement in one month, because the practice will use the equipment for years. Depreciation spreads the cost over that time, and the method you choose decides how evenly.

For most practices the choice is between straight line and reducing balance. This article explains what each one assumes, how to choose by type of equipment, and how the charge reaches the books each month in Achekam.

What each method assumes

Straight line

Straight line charges the same amount every period over the asset's useful life. It assumes the equipment gives roughly the same service each year until it is retired.

That fits equipment that wears steadily and does not date quickly: examination couches, treatment chairs, steel instrument trolleys, sterilisers, consulting-room furniture.

Reducing balance

Reducing balance charges a fixed rate on the asset's remaining carrying amount each period, so the charge is highest in the first year and falls after that. It assumes the equipment gives most of its value early, either because it wears faster when new or because newer models make it less useful.

That fits equipment driven by technology: imaging and diagnostic devices, computers and practice-management hardware, digital sensors and scanners. These are often replaced while they still work, because something better has arrived.

Investopedia's guide to depreciation explains how an asset's cost is spread over its useful life, with methods such as straight-line and double-declining balance, if you want the arithmetic behind each one.

Choose a method and useful life per type

Decide the method and useful life by type of equipment, not machine by machine. A practice usually needs only a handful of classes:

Agree the useful life for each class with your accountant, based on how long the practice actually keeps such equipment, and write the classes, methods and lives down as the practice's policy. Applying the same rule to every chair or every scanner keeps the books consistent and makes the policy easy to explain to a bank or an auditor.

Keep the accounting choice apart from tax. Achekam's fixed-asset register does not work out tax wear-and-tear, so your accountant deals with the tax allowances on the equipment separately from the depreciation in your books.

Add the asset at cost to the register

A business can add assets to Achekam's fixed-asset register at cost. Cost means what it took to get the equipment working in your rooms: the purchase price, plus delivery and installation where you paid for them. A warranty or service contract paid separately is usually an expense over the period it covers rather than part of the asset; agree the treatment with your accountant.

Give each significant item its own entry, with a description staff will recognise (the room it is in, the model), so that a disposal years later goes against the right asset.

The monthly depreciation journal

The register depreciates each asset monthly, by straight line or reducing balance, with a journal each month. That journal is what puts the charge into the books: a depreciation expense in the income statement and a growing accumulated depreciation against the asset on the balance sheet.

Management accounts then show it. They present an income statement for a chosen period beside the period before, and a balance sheet at period end, both added up from the practice's own journals. The general ledger lists every posted line, and the trial balance shows each account and whether debits equal credits.

Time the journal around month-end. Months can be soft-closed, hard-closed and locked, and a closed month refuses postings from every source. Run the month's depreciation before the month is closed, or the charge for that month will be refused and has to be dealt with in the next.

A worked example in words: a practice buys an ultrasound machine and adds it to the register at its full installed cost, in the imaging class, on reducing balance over the life agreed with the accountant. Each month the register's journal posts that month's charge. In the first year the charge is noticeably higher than in later years, which matches how quickly the machine's technology ages. The steriliser bought the same month, on straight line, posts the same charge every month.

Reviewing useful lives when equipment goes early

Equipment does not always reach the end of its planned life. A scanner is replaced after a few years because a better model arrives; a chair is sold when a surgery is refitted. When an asset leaves, dispose of it in the register: the profit or loss on disposal is posted to the books.

A pattern of losses on disposal is a signal. If the practice keeps retiring imaging devices well before their useful life ends, the life is too long. Review the lives each year with your accountant and adjust the policy for the remaining assets in that class going forward.

Other industries face the same choices; depreciating a vehicle fleet shows how a transport business sets lives and methods. When money is spent on existing rooms, refurbishment: asset or repair helps decide whether it belongs in the register at all.

Depreciation is a judgement made once and applied every month. Choose a method that fits how each class of equipment is really used, add each item at cost, and let the register's monthly journal carry the charge into the books.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.