Depreciation calculator

Depreciation spreads the cost of a long-lived asset, such as a vehicle, machine or computer, over the years it is used. Each year's depreciation is recorded as an expense, and the asset's book value falls until it reaches its salvage value, the amount you expect it to be worth at the end of its useful life.

This calculator builds a full-year schedule with the beginning book value, the depreciation for the year, accumulated depreciation and the ending book value. It runs entirely in your browser.

The simplest method spreads the cost evenly:

Annual depreciation = (cost − salvage value) / useful life

Example: a $30,000 delivery van with a $5,000 salvage value and a 5-year life:

(30,000 − 5,000) / 5 = $5,000 a year, a 20% straight-line rate on the depreciable amount. After 5 years the book value is $5,000.

Accelerated methods take more depreciation in early years, which often matches how assets such as vehicles and computers actually lose value. Declining balance applies a fixed percentage to the remaining book value each year. Double-declining balance uses twice the straight-line rate: 2 / 5 years = 40%.

Same van with 40% declining balance:

Year	Beginning value	Depreciation	Ending value
1	$30,000	$12,000	$18,000
2	$18,000	$7,200	$10,800
3	$10,800	$4,320	$6,480

Depreciation stops when the book value reaches the salvage value, so later years are smaller or zero.

This method also front-loads depreciation, but more gently. Add the years of useful life (for 5 years: 5 + 4 + 3 + 2 + 1 = 15). Each year's depreciation is the depreciable amount times the remaining life divided by that sum:

• Year 1: 25,000 × 5/15 = $8,333.33
• Year 2: 25,000 × 4/15 = $6,666.67
• Year 3: 25,000 × 3/15 = $5,000.00
• Year 4: 25,000 × 2/15 = $3,333.33
• Year 5: 25,000 × 1/15 = $1,666.67

The useful life must be a whole number of years for this method.

These methods are used in financial accounting and for internal planning. For U.S. federal income tax, most business property placed in service after 1986 is depreciated under MACRS, with recovery periods and conventions set by the IRS (see IRS Publication 946). Section 179 expensing and bonus depreciation can also change how much you deduct in the first year. This calculator does not compute MACRS or those deductions, and its full-year schedule ignores mid-year conventions.

Ask your accountant which method and recovery period apply to your assets. The schedule here is for information, not tax advice.

• Straight-line is simple, predictable and the most common choice in financial statements.
• Declining balance suits assets that lose value fastest when new, such as vehicles and electronics.
• Sum-of-the-years' digits is a middle ground: faster than straight-line early on, but smoother than declining balance.

Whatever you choose, the total depreciation over the asset's life is the same (cost minus salvage value); only the timing changes. Once you pick a method for an asset, use it consistently.