Depreciation Calculator
Calculate how much an asset loses in value each year using straight-line or declining-balance depreciation.
Example
A machine costs $10,000 with a $1,000 salvage value and a 5-year useful life. Straight-line depreciation is ($10,000 - $1,000) / 5 = $1,800 per year. With double-declining balance (200% / 5 = 40% rate), year 1 depreciation is $10,000 x 40% = $4,000, year 2 is $6,000 x 40% = $2,400, and so on until book value reaches the $1,000 salvage floor.
How it works
Enter the asset cost, salvage value, and useful life, then pick a method. The calculator shows first-year depreciation plus a year-by-year schedule of expense and book value.
Good to know
This Depreciation Calculator turns four inputs — asset cost, salvage value, useful life in years, and a declining-balance rate — into a full year-by-year depreciation schedule. It supports two of the most common methods: straight-line, which writes off the same dollar amount every year, and declining-balance (such as 200% double-declining), which charges more expense up front and tapers off. It is built for small-business owners, bookkeepers, finance students, and anyone who needs to estimate how a vehicle, machine, laptop, or other fixed asset loses value over time.
Reach for it when you are budgeting for an equipment purchase, modeling the non-cash expense that will hit a profit-and-loss statement, comparing how two methods affect early-year tax timing, or simply checking a figure before talking to an accountant. The declining-balance rate field accepts values from 100% to 300%, so you can model 150% (1.5x) or 200% (2x) acceleration; the rate is divided by the useful life to get the annual percentage applied to remaining book value.
Read the results from the top down: "First-year depreciation" is the largest single number to sanity-check, "Depreciable base" is cost minus salvage (the most you can ever write off), and "Ending book value" should land at or near the salvage value once the schedule completes. The table below shows each year's expense, the running accumulated total, and the remaining book value, so you can see exactly how the two methods diverge over the asset's life.
One practical caveat: declining-balance never depreciates an asset below its salvage value, so the calculator caps later years and the final book value floors at salvage rather than dropping to it smoothly. This is a clean accounting model, not a tax filing — real-world tax depreciation (for example, MACRS in the U.S.) uses fixed IRS tables, conventions, and bonus rules that differ from these textbook methods, so treat the output as an educational estimate.
Frequently asked questions
What is the difference between straight-line and declining-balance depreciation?
Straight-line spreads the depreciable base (cost minus salvage) evenly across each year of the asset's life. Declining-balance applies a fixed percentage to the remaining book value each year, so it front-loads more expense into the early years.
Why does declining-balance depreciation stop at the salvage value?
Because an asset should never be depreciated below what it can be sold for. This calculator caps the final years so accumulated depreciation never reduces book value past the salvage value, matching standard accounting practice.
Is my data uploaded anywhere?
No — this calculator runs entirely in your browser; nothing is uploaded.
Is this financial advice?
No. These are educational estimates — consult a qualified financial professional before making decisions.
People also ask
How do I calculate the double-declining balance depreciation rate?
Divide 200% by the asset's useful life in years, then apply that percentage to the remaining book value each year. For a 5-year asset, that is 200% / 5 = 40% per year, applied to the un-depreciated balance rather than the original cost.
What is salvage value in depreciation?
Salvage value (also called residual value) is the estimated amount you expect to recover when you sell or scrap an asset at the end of its useful life. It is subtracted from cost to get the depreciable base, and an asset is generally not depreciated below it.
Which depreciation method should I use, straight-line or declining-balance?
Straight-line gives an equal expense each year and is simplest for steady-use assets. Declining-balance front-loads expense into early years, which can better match assets that lose value or productivity quickly. The right choice depends on accounting policy and tax rules, so confirm with a professional.
Does this match the depreciation method the IRS requires for taxes?
Not necessarily. U.S. tax depreciation typically uses MACRS with prescribed recovery periods, conventions, and percentage tables, which can differ from textbook straight-line or declining-balance figures. This calculator is an educational estimate, not a tax computation.
What is the difference between book value and depreciable base?
Depreciable base is the total amount that will be written off over the asset's life (cost minus salvage). Book value is the asset's remaining recorded value at any point in time, equal to cost minus the depreciation accumulated so far.
How does useful life affect annual depreciation?
A longer useful life spreads the same depreciable base over more years, lowering each year's straight-line expense. Under declining-balance it also reduces the annual rate, since the rate is the chosen percentage divided by the number of years.
Can I depreciate an asset to zero?
Only if the salvage value is set to zero. When a salvage value is entered, depreciation stops once book value reaches that floor, so the ending book value equals the salvage amount rather than zero.
Is the data I enter into this calculator stored or shared?
No. The calculator runs entirely in your browser and performs all calculations locally; the cost, salvage, and life figures you type are not uploaded or transmitted anywhere.
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