Finance Calculator

Depreciation Calculator

Spread an asset’s depreciable cost over its useful life with straight-line or declining-balance rates.

Enter asset details

Cost, salvage value, useful life, and method. Declining balance uses rate = factor ÷ years.

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About this calculator

How to use Depreciation Calculator, plus the formulas and logic behind the results.

Tool description

Straight-line charges equal amounts each year. Declining balance applies a constant rate to the remaining book value and stops at salvage.

How to use

  1. Choose straight-line or declining balance.
  2. Enter cost, salvage, and useful life in years.
  3. For declining balance, set the factor (2 = double-declining).
  4. Select Calculate to view annual amounts and ending book value.

Formulas & reference

  • Straight-line annual = (Cost − Salvage) ÷ Years
  • DB rate = Factor ÷ Years
  • DB expenseₜ = Bookₜ₋₁ × Rate (not below salvage)

Method comparison

  • Straight-line = even expense
  • Declining balance = faster early expense
  • Factor 2 ≈ double-declining
  • Book value ≥ salvage

Calculation logic

Straight-line uses equal annual expense. Declining balance multiplies beginning book by rate each year, floored so book value does not fall below salvage. A year-by-year schedule summary is returned.

Accounting and tax rules vary by jurisdiction; this is an educational schedule, not tax filing guidance.

Depreciation Calculator FAQ

Common questions about the calculation and how to interpret the estimate.

What is straight-line depreciation?

The depreciable base (cost − salvage) is divided evenly across useful life.

What is declining balance?

A fixed percentage of remaining book value is expensed each year.

What does the factor mean?

Factor ÷ years is the annual rate. A factor of 2 is classic double-declining balance.

Can salvage exceed cost?

No. Salvage must be less than cost for a positive depreciable base.

Is this tax depreciation?

Not necessarily—tax systems often use prescribed tables (e.g. MACRS).

Why stop at salvage?

Assets are not depreciated below estimated residual value in these educational methods.