When is straight-line depreciation typically used?

Straight-line depreciation is typically used for assets expected to contribute evenly to revenues over their useful lives. This method allocates the cost of the asset equally across each period of its useful life, reflecting the assumption that the asset will provide consistent benefits over time. For instance, if a company purchases equipment that they anticipate will see steady use and generate uniform returns, straight-line depreciation effectively matches the expense of the asset with the income it helps produce, thereby allowing for straightforward financial analysis and budgeting.

In contrast, the other options do not align with the straight-line method's characteristics. For intangible assets, such as patents or trademarks, different depreciation or amortization methods may apply. Assets generating fluctuating revenue might require an accelerated depreciation method to match the varying contributions to income more accurately. Lastly, assets that will be sold immediately would not require depreciation assessment since their ownership duration is too short to warrant the application of any depreciation calculation.