Enter your Asset Cost, Salvage Value, and Service Life, then choose a Depreciation Method, Depreciation Factor, Start Year, and Convention to calculate your Annual Depreciation — plus your Total Depreciable Amount, Annual Depreciation Rate, Current Book Value, and Accumulated Depreciation.
Annual Depreciation
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Total Depreciable Amount
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Annual Depreciation Rate
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Current Book Value
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Accumulated Depreciation
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Equipment depreciation is an accounting method that allocates the cost of an asset over its useful life. It represents the decline in value due to wear, tear, and obsolescence over time.
Straight line is simplest and most common, providing equal annual depreciation. Double declining balance accelerates depreciation early. The choice depends on your accounting needs and tax strategy.
Salvage value is the estimated worth of an asset at the end of its useful life. Consider factors like age, condition, market demand, and potential resale value when estimating.
The depreciation factor multiplies the straight-line rate. A factor of 2 creates double declining balance method. Higher factors result in more accelerated depreciation in early years.
Conventions determine how to handle partial-year depreciation. Full-year assumes the asset was owned the entire year, while half-year takes half the first year's depreciation.
Generally, you cannot change depreciation methods for tax purposes once chosen, though accounting standards may allow changes in certain circumstances. Consult a tax professional.
Depreciation allows businesses to deduct the cost of assets over time rather than all at once, reducing taxable income annually and improving cash flow management.
When fully depreciated, the asset's book value equals its salvage value. You can continue using the asset, but no further depreciation expense is recorded unless you reassess its useful life.