Depreciation Calculator
Method
Try an example
Depreciation each year
$4,500.00
($50,000.00 − $5,000.00) ÷ 10 years, the same every year.
Total depreciated over 10 years: $45,000.00, leaving the $5,000.00 salvage value.
| Year | Depreciation | Accumulated | Book value at year end |
|---|---|---|---|
| 1 | $4,500.00 | $4,500.00 | $45,500.00 |
| 2 | $4,500.00 | $9,000.00 | $41,000.00 |
| 3 | $4,500.00 | $13,500.00 | $36,500.00 |
| 4 | $4,500.00 | $18,000.00 | $32,000.00 |
| 5 | $4,500.00 | $22,500.00 | $27,500.00 |
| 6 | $4,500.00 | $27,000.00 | $23,000.00 |
| 7 | $4,500.00 | $31,500.00 | $18,500.00 |
| 8 | $4,500.00 | $36,000.00 | $14,000.00 |
| 9 | $4,500.00 | $40,500.00 | $9,500.00 |
| 10 | $4,500.00 | $45,000.00 | $5,000.00 |
These are book (accounting) methods with full-year amounts. For U.S. tax returns most business property is depreciated with MACRS, which uses IRS recovery periods, a zero salvage value and half-year, mid-quarter or mid-month conventions, so its yearly figures differ.
Build a depreciation schedule with the straight-line, declining-balance or sum-of-the-years'-digits method: yearly depreciation, accumulated depreciation and book value from an asset's cost, salvage value and useful life.
Formula
Worked Example
Double-declining takes 2 ÷ 7 = 28.57% of the remaining book value each year: $120,000 × 28.57% = $34,285.71, then 28.57% of $85,714.29. In year 7 straight-line on the remaining $15,937.24 gives more, so the schedule switches and ends exactly at the $10,000 salvage value.
Frequently Asked Questions
Which depreciation method should I use?
Straight-line is the simplest and the most common in financial statements. Accelerated methods such as double-declining balance and sum-of-the-years'-digits fit assets that lose value or usefulness fastest when new, such as vehicles and computers. Whichever you choose, total depreciation is the same: cost minus salvage value.
What is double-declining balance?
A declining-balance method at twice the straight-line rate: 2 ÷ useful life, applied each year to the book value that remains. Because the base shrinks, it never reaches salvage on its own, so it switches to straight-line once that gives a larger amount, and never goes below the salvage value.
Is this the same as depreciation for taxes?
Not for U.S. federal taxes, which mostly use MACRS: IRS recovery periods, no salvage value and half-year or mid-quarter conventions. Section 179 and bonus depreciation can also allow much larger first-year deductions, so check current IRS rules or a tax professional for a return.