Depreciation Calculator

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Calculate how an asset loses value over time using three standard accounting methods. Enter the asset cost, salvage value, and useful life to generate a complete depreciation schedule, accumulated totals, and a book value chart.

How to Use

01

Enter the asset cost, salvage value, and useful life in years.

02

Select a depreciation method. For declining balance, choose double or single.

03

Click Calculate to see summary cards, a book value chart, and the full schedule.

04

Compare methods by switching the dropdown and recalculating.

How Depreciation Methods Work

Straight line spreads the depreciable amount evenly: annual depreciation equals (cost minus salvage) divided by useful life. Every year has the same charge. Declining balance accelerates depreciation. The double declining variant uses twice the straight line rate applied to the remaining book value each year, automatically switching to straight line when that produces a higher deduction. Single declining uses the straight line rate without doubling. Sum of years digits also front loads depreciation: each year's fraction is the remaining life divided by the sum of all year digits. For a 5 year life, the sum is 15, so year 1 gets 5/15 of the depreciable base. Accelerated methods better reflect how assets like vehicles or equipment lose value faster when new.

Step by Step Example

  1. Asset: cost 10,000 | salvage 1,000 | useful life 5 years
  2. Straight line: annual depreciation = (10,000 minus 1,000) / 5 = 1,800 per year
  3. Year 1 book value = 10,000 minus 1,800 = 8,200 | Year 5 book value = 1,000 (salvage)
  4. Double declining: rate = 2/5 = 40% | Year 1 = 10,000 × 40% = 4,000 | Book value = 6,000
  5. Year 2 DB = 6,000 × 40% = 2,400 | SL check = (6,000 minus 1,000)/4 = 1,250 so DB wins
  6. SYD: total = 5+4+3+2+1 = 15 | Year 1 = 9,000 × 5/15 = 3,000 | Year 2 = 9,000 × 4/15 = 2,400

When to Use This Calculator

  • Planning capital expenditure budgets and forecasting annual depreciation charges
  • Comparing methods to choose the most tax advantageous approach for an asset
  • Preparing financial statements that require consistent depreciation reporting
  • Estimating book value at the time of a planned asset sale or disposal
  • Understanding how equipment, vehicles, or property lose value year by year
  • Teaching or learning standard accounting depreciation concepts

Important Note

This calculator provides estimates using standard accounting formulas for informational purposes. Actual tax depreciation rules such as MACRS in the US, capital allowances in the UK, or other jurisdiction specific schedules may differ significantly. Consult a qualified accountant or tax advisor before making financial or tax decisions based on these calculations.

Straight Line vs. Accelerated Methods

Straight line is simple, predictable, and applies equal charges every year
Accelerated methods provide higher early deductions that can reduce taxable income sooner
Declining balance reflects how equipment and vehicles actually lose value faster when new
Accelerated methods front load expense, reducing reported profit in early years
Complex methods require recalculation each year and careful record keeping
Book value under accelerated methods may differ substantially from market value at sale

Key Features

Three Standard Methods

Straight line, double or single declining balance, and sum of years digits cover the most common accounting approaches.

Full Annual Schedule

See depreciation expense, accumulated depreciation, and remaining book value for every year of the asset's life.

Book Value Chart

A line chart shows how book value declines over time, making it easy to compare the shape of each method visually.

Automatic SL Switchover

Double declining balance automatically switches to straight line when that produces a larger deduction, matching standard accounting practice.