Depreciation Calculator (Straight-Line) mechanism

Model scope

The straight-line annual depreciation formula is standard and correct under the stated assumptions. Verdict is NEEDS_REVIEW because the instrument also claims to produce a book value schedule without specifying its formula, boundary behavior, partial-year handling, validation constraints, or rounding policy. The educational-only and non-tax-filing label is appropriate.

• The annual depreciation formula is correct for straight-line depreciation: (cost - salvage value) / useful life.
• The claimed book value schedule lacks an explicit formula. It should define book value at time t as cost - (annual depreciation × elapsed years), with book value not falling below salvage value and ending at salvage value at the end of useful life.
• The specification does not state whether partial years are supported or how schedules should be rounded.

Units and conventions

• Cost and salvage value use the same currency and monetary units.
• Useful life is measured in years, not months; a 48-month life must be converted to 4 years before applying the formula.
• Annual depreciation is assumed to be a constant amount per year.
• The schedule is assumed to report beginning book value at year 0 and ending book value at the useful-life endpoint.

Inspectable vector

One of 4 source-bound review vectors:

{
  "inputs": {
    "cost": 12000,
    "salvage_value": 2000,
    "useful_life_years": 5
  },
  "expected_outputs": {
    "annual_depreciation": 2000,
    "book_value_schedule": [
      {
        "year": 0,
        "book_value": 12000
      },
      {
        "year": 1,
        "book_value": 10000
      },
      {
        "year": 2,
        "book_value": 8000
      },
      {
        "year": 3,
        "book_value": 6000
      },
      {
        "year": 4,
        "book_value": 4000
      },
      {
        "year": 5,
        "book_value": 2000
      }
    ]
  },
  "working": "Depreciable base = 12,000 - 2,000 = 10,000. Annual depreciation = 10,000 / 5 = 2,000. Book values: year 0 = 12,000; year 1 = 12,000 - (1 × 2,000) = 10,000; year 2 = 12,000 - (2 × 2,000) = 8,000; year 3 = 12,000 - (3 × 2,000) = 6,000; year 4 = 12,000 - (4 × 2,000) = 4,000; year 5 = 12,000 - (5 × 2,000) = 2,000."
}

Failure boundary

• Useful life of zero causes division by zero and must be rejected.
• Negative or nonnumeric useful life must be rejected.
• Salvage value greater than cost produces negative depreciation and should be rejected or explicitly handled.
• Negative cost or salvage values require validation and should generally be rejected.
• Without a floor at salvage value, rounding or extra elapsed periods can reduce book value below salvage value.
• The currency is unspecified; cost and salvage value must be in the same currency and unit.
• A fractional useful life requires defined treatment for partial-year depreciation and schedule display.
• Rounding policy is unspecified; displayed annual depreciation and book values may not reconcile exactly unless precision is defined.

Other records

Sources and evidence

These pointers bind the page to evidence. They do not grant authority or collapse verification into deployment.

• VERIFIED_LEDGER.json
• evidence-tranche5/tranche5-results.json