Calculate the accumulated depreciation of any asset using the Straight-Line, Declining Balance, or Sum of the Year's Digits method. Enter your asset cost, salvage value, useful life, and number of years elapsed — and get back the accumulated depreciation, current book value, and a full year-by-year depreciation schedule.
Accumulated Depreciation
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Current Book Value
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Average Annual Depreciation
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Depreciation Rate
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Accumulated depreciation is the total amount of depreciation expense that has been recorded for an asset since it was placed in service. It is a contra-asset account on the balance sheet, meaning it reduces the gross asset value to show the asset's current book value. Unlike annual depreciation, it grows each year over the asset's useful life.
Accumulated depreciation applies to tangible fixed assets such as machinery, vehicles, computers, furniture, buildings, and equipment. These are assets with a finite useful life that lose value over time through wear and tear, obsolescence, or usage. Intangible assets like patents undergo a similar process called amortization.
No. Land is considered to have an indefinite useful life and does not depreciate. Unlike buildings or equipment, land does not wear out or become obsolete, so it is carried on the balance sheet at its original cost (or fair value if revalued). Only the structures built on land are depreciated.
Straight-Line depreciation spreads the cost evenly over the asset's useful life, resulting in the same depreciation expense each year. Declining Balance (especially Double Declining Balance) front-loads depreciation, recording higher expenses in the early years and lower amounts later. Declining Balance is often used for assets that lose value quickly, like technology or vehicles.
The formula is: Accumulated Depreciation = ((Cost − Salvage Value) / Useful Life) × Number of Years. For example, an asset costing $25,000 with a $3,000 salvage value and a 15-year life depreciates at $1,466.67 per year. After 3 years, accumulated depreciation would be $4,400.00.
Book Value = Original Asset Cost − Accumulated Depreciation. For instance, if an asset originally cost $25,000 and has accumulated depreciation of $4,400, the current book value is $20,600. Book value represents the net value of the asset as reported on the company's balance sheet.
SYD is an accelerated depreciation method that assigns a higher depreciation expense in the early years of an asset's life. Each year's depreciation is calculated by multiplying the depreciable cost by a fraction — the numerator is the remaining useful life and the denominator is the sum of all digits from 1 to the total useful life. For a 5-year asset, the sum of digits is 1+2+3+4+5 = 15.
Salvage value (also called residual or scrap value) is the estimated worth of an asset at the end of its useful life. It matters because depreciation is calculated only on the depreciable cost, which is the original cost minus the salvage value. A higher salvage value means less total depreciation is recognized over the asset's life.