Depreciation Calculator

The Depreciation Calculator builds a complete, year-by-year depreciation schedule for any fixed asset using the three most common accounting methods: straight-line, declining balance (including double-declining 200% and 150%), and sum-of-years' digits. For each year you get the depreciation expense, accumulated depreciation, and remaining book value — plus an animated chart that overlays all three methods so you can instantly see how accelerated depreciation front-loads your deductions compared with the even, straight-line approach.

What Is Depreciation?

Depreciation is the accounting process of spreading the cost of a tangible asset — machinery, vehicles, equipment, furniture — over the years it is used, rather than expensing it all at once. It matches the asset's cost against the revenue it helps produce and reflects wear, age, and obsolescence. The total amount written off over the asset's life is the depreciable base: the purchase cost minus the estimated salvage (residual) value.

Depreciation Formulas

Comparing the Three Methods

Accelerated vs. Straight-Line: Why It Matters

Straight-line and accelerated methods write off the same total amount over an asset's life — they only differ in timing. Accelerated methods (declining balance and sum-of-years' digits) take bigger deductions early, which can reduce taxable income sooner and improve early cash flow. Straight-line keeps expenses level and is easier to forecast. The chart in your results draws all three book-value curves together so the trade-off is obvious at a glance.

When to Use Each Method

How to Use This Calculator

1. Choose a method: Pick straight-line, declining balance, or sum-of-years' digits. For declining balance, also choose the factor (200% double-declining or 150%).
2. Enter the asset details: Type the asset cost, salvage (residual) value, and useful life in years, and select your currency.
3. Set the first-year convention: If the asset was placed in service partway through the year, choose how many months it was used in year one.
4. Click Calculate: The tool generates the full schedule, the method comparison, and the book-value chart instantly.
5. Review the results: Read the year-by-year table, compare all three methods, and follow the step-by-step formula breakdown.

Frequently Asked Questions

What is depreciation?

Depreciation is the systematic allocation of the cost of a tangible asset over its useful life. Instead of expensing the full cost in the year of purchase, you spread it across the years the asset helps generate revenue, reflecting wear, age, and obsolescence.

What is the difference between straight-line, declining balance, and sum-of-years' digits?

Straight-line spreads the depreciable base evenly across every year. Declining balance and sum-of-years' digits are accelerated methods that take larger deductions in the early years and smaller ones later. Declining balance applies a fixed rate to the falling book value, while sum-of-years' digits weights each year by the remaining life over the sum of the years' digits.

How is straight-line depreciation calculated?

Subtract the salvage value from the asset cost to get the depreciable base, then divide by the useful life in years. The result is the same depreciation expense for every year of the asset's life.

What is double declining balance depreciation?

Double declining balance is an accelerated method that uses twice (200%) the straight-line rate. The rate is applied to the book value at the start of each year, so the expense is highest in year one and declines each year. Depreciation stops once book value reaches the salvage value.

What is salvage value?

Salvage value, also called residual or scrap value, is the estimated amount an asset is worth at the end of its useful life. It is subtracted from the cost to find the depreciable base, and an asset is never depreciated below its salvage value.

What is a partial first-year convention?

If an asset is placed in service partway through the year, only a fraction of the first full year's depreciation is taken. For example, an asset used for 6 of 12 months takes half of year one's depreciation, and the remaining amount rolls forward, extending the schedule by one fiscal year.

Additional Resources

• Depreciation - Wikipedia
• Book Value - Wikipedia