Depreciation Calculator
Calculate depreciation with straight-line, double-declining balance, 150% declining balance or sum-of-the-years-digits methods, and see the full year-by-year schedule of expense, accumulated depreciation and book value. Example: a $10,000 asset with $1,000 salvage over 5 years depreciates $1,800 a year on a straight-line basis.
Show steps
How to use the Depreciation Calculator
- Enter the asset cost, expected salvage value and useful life in years.
- Choose a depreciation method.
- Press Calculate to see the first-year expense and the full schedule.
Formula and method
Straight-line = (cost – salvage) / life. Declining balance = opening book value x (factor / life), never going below salvage. Sum-of-the-years-digits = (cost – salvage) x (remaining life / n(n+1)/2). Book value = cost – accumulated depreciation.
Worked example: $10,000, $1,000 salvage, 5 years
| Method | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Straight-line | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 |
| Double-declining | $4,000 | $2,400 | $1,440 | $864 | $296 |
| Sum-of-years-digits | $3,000 | $2,400 | $1,800 | $1,200 | $600 |
Which method to choose
| Method | Pattern | Best for |
|---|---|---|
| Straight-line | Equal each year | Assets that wear evenly |
| Declining balance | Higher early expense | Equipment that loses value fast |
| Sum-of-years-digits | Front-loaded, smoother | Moderately accelerated write-off |
Book value versus market value
Book value is the accounting number left after depreciation. The market price an asset sells for can be higher or lower, and the gap creates a gain or loss on sale.
Useful life examples
Computers are often 3 to 5 years, vehicles 5 years, office furniture 7 years and buildings 27.5 or 39 years for US tax purposes.
Frequently asked questions
What is depreciation?
The allocation of an asset’s cost over its useful life.
How do I calculate straight-line depreciation?
Subtract salvage value from cost and divide by the useful life.
What is double-declining balance?
An accelerated method that applies twice the straight-line rate to opening book value.
Can book value go below salvage?
No, depreciation stops at salvage value.
Is this the same as tax depreciation?
Not always. US tax uses MACRS and special deductions.
What is salvage value?
The estimated value of the asset at the end of its useful life.
Sources
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