Calculate how much an asset loses in value each year using your preferred depreciation method. Enter the asset cost, salvage value, and useful life, then choose between Straight Line, Declining Balance, or Sum of Years' Digits — and get a full year-by-year depreciation schedule with annual expense, accumulated depreciation, and remaining book value.
Year 1 Depreciation
--
Total Depreciation
--
Annual Depreciation Rate
--
Final Book Value
--
Depreciation is an accounting method used to allocate the cost of a tangible asset over its useful life. Rather than recording the full cost of an asset in the year it was purchased, businesses spread the expense over several years to better match costs with the revenues the asset helps generate.
Straight Line depreciation spreads the cost evenly over the asset's useful life, producing the same expense each year. Declining Balance depreciation applies a fixed percentage to the remaining book value each year, resulting in higher depreciation in earlier years and lower amounts as the asset ages.
Double Declining Balance (DDB) is an accelerated depreciation method that applies twice the straight-line rate to the asset's remaining book value each year. It front-loads depreciation, making it useful when an asset loses value more rapidly in its early years.
The Sum of Years' Digits (SYD) method is another accelerated approach. It calculates a fraction each year based on the remaining useful life divided by the sum of all year digits. Like declining balance, it results in higher depreciation early on and lower amounts toward the end of the asset's life.
Salvage value (also called residual value) is the estimated worth of an asset at the end of its useful life. Depreciation is calculated on the depreciable amount — the original cost minus salvage value — so a higher salvage value means less total depreciation over the asset's life.
It depends on your goals. Straight Line is the simplest and most common for financial reporting. Declining Balance or Double Declining Balance are preferred for assets that lose value quickly (like electronics or vehicles). Sum of Years' Digits is a middle-ground accelerated method. Always consult an accountant for tax purposes.
Book value is the net value of an asset on the balance sheet — its original cost minus accumulated depreciation to date. It decreases each year as depreciation is recorded and should equal the salvage value at the end of the asset's useful life.
This calculator covers the most common accounting depreciation methods (Straight Line, Declining Balance, Double Declining, and Sum of Years' Digits). For US tax depreciation under MACRS (Modified Accelerated Cost Recovery System), you would need a specialized MACRS calculator, as it uses IRS-mandated recovery periods and rates.