Depreciation Calculator
Work out how much an asset depreciates each year and its book value, with a full schedule. Compare straight-line, declining balance, sum-of-the-years' digits and units of production.
What you paid, plus delivery and set-up costs.
Whole years.
Applied to the book value at the start of each year.
Without it, the last year takes the book value down to salvage.
Hours, km, miles, items made…
A list, one figure a year. One figure repeats for the useful life.
Worked out for you when you add the date.
Needs the date put in use.
Depreciation schedule: table and chart
| Year | Opening book value | Depreciation | Accumulated | Closing book value |
|---|
Methods compared: book value over time
| Method | Year 1 | Year 2 | Book value after year 3 |
|---|
Declining methods here switch to straight-line when that gives more.
How your depreciation is worked out
Spread the cost, less what it will be worth at the end, over the asset's life.
- 1
Amount to spread
10,000 − 1,000= 9,000
- 2
Same each year
9,000 ÷ 5 years= 1,800 a year
- 3
First year
1,800 × 12/12= 1,800
- 4
Book value
10,000 − 1,800= 8,200after year 11,000 by year 5
Read more: the formula for each method, a worked example and notes
Depreciation spreads the cost of an asset, such as a machine, vehicle, computer or building fit-out, over the years it is used, instead of counting it all as a cost in the year you buy it. Each year's share is an expense in the accounts, and the cost less all depreciation so far is the book value. The amount you expect to get back at the end is the salvage (or residual) value; the book value never goes below it.
The formula
amount to spread = cost − salvage value
straight-line: each year = (cost − salvage) ÷ useful life
declining balance: each year = book value at the start of the year × rate
double-declining rate = 2 ÷ life; 150% rate = 1.5 ÷ life
switch: use (book value − salvage) ÷ years left when that is more
sum-of-the-years' digits: year k = (cost − salvage) × (life − k + 1) ÷ (1 + 2 + … + life)
units of production: each year = (cost − salvage) ÷ total units × units used that year
part first year: × months used ÷ 12
book value = cost − depreciation so far, never below salvage
Worked example
With the starting inputs (shown in US dollars; they follow your currency) an asset costs $10,000, has a salvage value of $1,000 and a 5-year life, and is used for the full first year. The amount to spread is $10,000 − $1,000 = $9,000.
Straight-line: $9,000 ÷ 5 = $1,800 a year. The book value falls to $8,200, $6,400, $4,600, $2,800 and $1,000 at the end of year 5.
Double-declining: the rate is 2 ÷ 5 = 40%. Year 1: $10,000 × 40% = $4,000 (book value $6,000). Year 2: $6,000 × 40% = $2,400 ($3,600). Year 3: $1,440 ($2,160). Year 4: $864 ($1,296). Year 5 would be $518.40, but only $1,296 − $1,000 = $296 is left above salvage, so that is all it takes.
Sum-of-the-years' digits: 1 + 2 + 3 + 4 + 5 = 15, so the years take 5/15, 4/15, 3/15, 2/15 and 1/15 of $9,000: $3,000, $2,400, $1,800, $1,200 and $600.
Units of production: with 100,000 units over its life the rate is $9,000 ÷ 100,000 = $0.09 a unit. Using 20,000, 30,000, 25,000, 15,000 and 10,000 units gives $1,800, $2,700, $2,250, $1,350 and $900.
Part first year: if the asset is put in use in July and the year ends in December, year 1 has 6 months: straight-line gives $1,800 × 6/12 = $900, then $1,800 a year for years 2–5, and the last $900 in year 6.
Which method to use
| Method | Pattern | Good for |
|---|---|---|
| Straight-line | Same every year | Most assets, buildings, furniture; the simplest and most common |
| Declining balance (150%, 200% or your %) | Most in the early years | Vehicles, computers and machines that lose value or usefulness fast |
| Sum-of-the-years' digits | Falls by the same step each year | Assets that are most productive when new |
| Units of production | Follows how much it is used | Machines, vehicles and equipment whose wear follows hours, km or output |
These are accounting methods for financial statements. Tax depreciation is set by each country's own rules, rates, asset classes and first-year conventions, and is not shown here. Amounts are worked to the cent and shown rounded to whole units. Set a part first year in Advanced mode. Checked against textbook examples on 13 October 2026.
Common questions
How do you calculate straight-line depreciation?
Take the salvage value (what the asset will be worth at the end) off the cost, then divide by the useful life in years. An asset that costs 10,000, with a salvage value of 1,000 and a 5-year life, depreciates by (10,000 − 1,000) ÷ 5 = 1,800 a year.
How does double-declining balance work?
Double the straight-line rate and apply it to the book value at the start of each year. For a 5-year life the rate is 2 ÷ 5 = 40%. A 10,000 asset loses 4,000 in year 1, then 40% of 6,000 = 2,400 in year 2, and so on. Salvage is not taken off first, but the book value is never allowed to go below it.
When should declining balance switch to straight-line?
Switch in the first year where spreading what is left (book value − salvage) evenly over the remaining life gives more than the declining-balance figure. With a 10,000 asset, no salvage and a 5-year life, double-declining gives 864 in year 4, but 2,160 ÷ 2 = 1,080 straight-line, so you switch in year 4.
What is sum-of-the-years' digits depreciation?
Add up the years of the life (for 5 years: 1 + 2 + 3 + 4 + 5 = 15). Year 1 takes 5/15 of the cost less salvage, year 2 takes 4/15, and so on down to 1/15. With 9,000 to spread that is 3,000, 2,400, 1,800, 1,200 and 600.
How do I depreciate an asset bought part way through the year?
Count the months it was in use in the first financial year. Straight-line and declining balance take that share of a full year, so 6 months is half. The life then runs into one more short year at the end. In Advanced mode, enter the months, or the date it was put in use and the month your financial year ends.
Is this the same as tax depreciation?
No. These are the standard accounting methods used in financial statements. Tax depreciation follows each country’s own rules, rates, asset classes and first-year conventions, which can give very different figures. Check your local tax rules or an accountant for tax returns.
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