Depreciation Calculator
Modify the values and click calculate
Asset Details
First-Year Depreciation
Enter asset details and select a method to see the depreciation schedule.
Depreciation Schedule
Year-by-year depreciation, accumulated depreciation, and ending book value.
| Year | Depreciation | Accumulated | Ending Book Value |
|---|
Understanding Asset Depreciation
Depreciation spreads the cost of a long-lived asset -- equipment, a vehicle, machinery -- over its useful life instead of expensing the full cost the day it's purchased. Different methods spread that cost differently: some spread it evenly, others front-load the expense in the earliest years. All three methods this calculator supports depreciate the exact same total amount (cost minus salvage value); they only differ in the timing.
Straight-Line: Even and Predictable
The simplest method: (cost − salvage) ÷ life is expensed every single year, in equal amounts, until the asset reaches its salvage value.
Declining Balance: Front-Loaded
Each year, a fixed percentage (accelerator ÷ life) is applied to the asset's current book value rather than its original cost -- so the dollar amount of depreciation shrinks every year, front-loading the expense.
Sum-of-Years-Digits: Also Front-Loaded
A different way to accelerate depreciation: each year's share is a fraction of the total depreciable amount, weighted by the years remaining -- also front-loaded, but on a smoother, more predictable curve than declining balance.
Never Below Salvage Value
An asset's book value should never be depreciated below its salvage value. This calculator caps the final depreciating year's expense so the book value lands exactly at salvage -- never above or below it.
Worked Example
Suppose an asset costs $50,000, has a $5,000 salvage value, and a 5-year useful life (accelerator factor of 2 for declining balance):
- Straight-Line, Year 1: ($50,000 − $5,000) ÷ 5 = $9,000.00 (same every year).
- Declining Balance, Year 1: $50,000 × (2 ÷ 5) = $20,000.00.
- Sum-of-Years-Digits, Year 1: (5 ÷ 15) × $45,000 = $15,000.00.
- All three methods: total exactly $45,000.00 depreciated over the 5 years, ending at the $5,000 salvage value.
Year 1 Depreciation by Method
- Straight-Line: $9,000.00
- Sum-of-Years-Digits: $15,000.00
- Declining Balance: $20,000.00
Choosing a Method
Straight-line is the most common method for financial reporting because it's simple and predictable. Accelerated methods like declining balance and sum-of-years-digits are often used when an asset genuinely loses more value or usefulness earlier in its life (vehicles and technology are common examples), or for tax strategies that favor larger deductions sooner. Whichever method you choose, always confirm it's appropriate for your jurisdiction's tax rules or your organization's accounting policy -- this calculator is a modeling tool, not tax or accounting advice.
Key Takeaways
- Same Total, Different Timing: All three methods depreciate the same total amount (cost minus salvage) -- they only differ in how quickly that total is expensed.
- Accelerated Methods Front-Load the Expense: Declining balance and sum-of-years-digits both expense more in the early years and less later, unlike straight-line's flat amount.
- Book Value Never Drops Below Salvage: The schedule automatically caps the final depreciating year so the asset's book value ends exactly at its salvage value.
- Match the Method to the Asset: Assets that lose usefulness quickly (vehicles, tech) are often better modeled with an accelerated method than straight-line.