Asset Depreciation Calculator
This asset depreciation calculator works out how much value a fixed asset loses each year over its useful life and shows the full schedule in one table. Enter the original cost of the asset, its expected salvage (residual) value at the end of its life, and the number of years you plan to use it. Then choose one of two common methods — straight-line or double declining balance — and the calculator returns the first-year depreciation plus a year-by-year breakdown of the annual expense, the accumulated depreciation and the remaining book value. It is a handy tool for small businesses, freelancers, students and anyone who needs a quick estimate of how vehicles, machinery, computers, furniture or other equipment will be written down over time.
First-year depreciation
| Year | Depreciation | Accumulated | Book value |
|---|---|---|---|
Simplified calculation. Tax rules and allowed depreciation methods vary by country — consult an accountant.
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How it works
Straight-line depreciation spreads the cost evenly: each year you deduct (cost − salvage) ÷ useful life, so a $10,000 asset with a $1,000 salvage over 5 years loses $1,800 per year. The double declining balance method is accelerated — it charges more depreciation early on. Each year it multiplies the current book value by 2 ÷ useful life; for a 5-year life that rate is 40%, so the first year deducts $4,000, the second year 40% of the remaining $6,000, and so on. The expense is never allowed to push the book value below the salvage value, so in the final years the deduction is capped. Accumulated depreciation is the running total of all deductions, and book value is cost minus that total.
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Preguntas frecuentes
- What is depreciation?
- Depreciation is the accounting process of spreading the cost of a tangible asset over the years it is used, rather than expensing the whole amount at once. It reflects the wear, aging and obsolescence of assets like vehicles, machinery or computers and lets the expense match the periods that benefit from the asset.
- What is the difference between straight-line and double declining balance?
- Straight-line charges the same depreciation every year — (cost − salvage) ÷ useful life. Double declining balance is accelerated: it applies a fixed rate of 2 ÷ useful life to the falling book value, so deductions are largest in the early years and shrink over time. Straight-line reaches exactly the salvage value at the end of the useful life, whereas double declining balance front-loads the expense in the early years and may not land precisely on the salvage value by the end of the period.
- What is salvage (residual) value?
- Salvage value is the estimated amount you expect to recover when you dispose of the asset at the end of its useful life — for example the resale or scrap price. It is subtracted from the cost when calculating straight-line depreciation, and it is the floor below which book value cannot fall.
- What is book value?
- Book value is the asset's cost minus the accumulated depreciation recorded so far. It represents the remaining carrying amount on the balance sheet and gradually declines toward the salvage value as the asset is depreciated.
- Which method should I use?
- It depends on the asset and your local tax rules. Straight-line is simple and common for assets that lose value evenly. Accelerated methods like double declining balance suit assets that lose most value early, such as technology. Allowed methods and useful lives are set by tax law, so confirm with an accountant.