Depreciation Calculator

Modify the values and click the Calculate button to use

Annual Depreciation: $2,000.00

Method: Straight Line
First-Year Depreciation: $2,000.00
Total Depreciation: $10,000.00
Years: 5

Depreciation schedule

Year	Depreciation	Accumulated	Book value
1	$2,000.00	$2,000.00	$9,000.00
2	$2,000.00	$4,000.00	$7,000.00
3	$2,000.00	$6,000.00	$5,000.00
4	$2,000.00	$8,000.00	$3,000.00
5	$2,000.00	$10,000.00	$1,000.00

What this depreciation calculator does

This calculator estimates annual depreciation and book value using three common methods: straight line, declining balance, and sum of the years' digits. It uses the asset cost, salvage value, useful life, and declining-balance factor.

The result includes a year-by-year schedule showing depreciation, accumulated depreciation, and book value.

How to use this calculator

Choose the depreciation method.
Enter the asset cost and salvage value.
Enter the useful life in years.
For declining balance, enter the depreciation factor.
Click Calculate.

The default example uses an $11,000 asset with a $1,000 salvage value and a five-year life. Straight-line depreciation is $2,000 per year.

Depreciation formulas

Straight line:

Annual depreciation = (Asset cost − Salvage value) / Useful life

Declining balance:

Depreciation = Beginning book value × (Factor / Useful life)

The final year is adjusted so book value does not fall below salvage value.

Sum of the years' digits:

Year factor = Remaining years / (1 + 2 + ... + Useful life)
Depreciation = (Asset cost − Salvage value) × Year factor

What the results include

First-year depreciation: the depreciation for year one.
Total depreciation: the depreciable amount, cost minus salvage.
Depreciation schedule: yearly depreciation, accumulated depreciation, and book value.

Assumptions and limitations

The calculator assumes a full year of depreciation in the first year. It does not model partial-year conventions, mid-month or half-year conventions, MACRS tax tables, bonus depreciation, asset disposals, or changes in estimates. The declining-balance method stops at salvage value.

Frequently asked questions

Which depreciation method should I use?

Straight line is simple and even. Declining balance front-loads depreciation. Sum of the years' digits also front-loads depreciation but at a different pattern. The right method depends on accounting policy and tax rules.

What is salvage value?

Salvage value is the estimated value of the asset at the end of its useful life. It is not depreciated.

Does this calculate tax depreciation?

No. It calculates book depreciation using common methods. MACRS and other tax depreciation systems are not included.

What happens in the final year?

The final year is adjusted so the book value ends at the salvage value. This prevents over-depreciation from rounding or from the declining-balance rate.

Reference table

Depreciation methods

Depreciation method	Straight Line Declining Balance Sum of the Year's Digits
Straight line	Equal expense each year: (cost − salvage) ÷ useful life
Declining balance	Fixed percentage of book value each year
Sum of the year's digits	Accelerated expense based on remaining life ÷ digit sum
Units of production	Expense based on actual usage

Different methods produce different annual expenses but the same total depreciation over the asset's life, if salvage value is unchanged.

Source

References:

Disclaimer

This calculator is for informational purposes only. It is not tax or accounting advice. Confirm depreciation methods with your accountant.

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