Depreciation Calculator
Depreciation Calculator
Estimate periodic depreciation, accumulated depreciation, and book value with straight-line, declining-balance, or sum-of-years-digits methods.
Asset details
Choose a method and enter the asset assumptions. Results update as you type.
Straight-line is even; the other two methods accelerate expense into earlier years.
Purchase price plus costs required to place the asset in service.
Expected residual value at the end of the useful life.
Whole years the asset is expected to provide economic benefit.
Whole years elapsed, from 0 through the useful life.
Results
The selected method drives the headline result and detailed schedule.
Depreciation expense
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Book value is original cost minus accumulated depreciation, subject to the salvage-value floor.
Asset value position
See how original cost is divided at the selected snapshot.
Book value by method
Compare how quickly each method reduces the asset's carrying amount.
Selected method schedule
Year-by-year expense, accumulated depreciation, and ending book value.
| Year | Opening book value | Depreciation expense | Accumulated depreciation | Ending book value |
|---|
Method comparison table
These values are the same data points used in the comparison chart.
| Year | Straight-line book value | Declining-balance book value | Sum-of-years-digits book value |
|---|
How to use this depreciation calculator
This tool estimates how an asset's recorded value changes over its useful life. It is designed for planning, analysis, and educational comparison rather than personalized accounting or tax advice. The calculator keeps full precision internally and rounds currency only for display and Excel export.
Choose the depreciation method
Straight-line allocates the depreciable base evenly across the asset's useful life. It is usually the clearest choice when the asset provides a broadly consistent level of benefit each year. A longer useful life lowers the annual expense; a shorter life raises it.
Declining balance applies a constant rate to the previous year's book value. In this calculator, that rate is derived from original cost, salvage value, and useful life so the schedule reaches the salvage value at the end. A lower salvage value produces a higher derived rate and more front-loaded depreciation. When salvage is zero, the mathematical rate becomes 100%, so the full cost is recognized in the first year; a small positive salvage value creates a smoother declining curve.
Sum of years digits is another accelerated method. It assigns the largest fraction of the depreciable base to year one, then steps the fraction down each year. It reaches the same total depreciation as straight-line, but recognizes more expense near the beginning of the schedule.
Enter each asset assumption
- Original cost is required and must be greater than zero. Include the purchase price and other directly attributable costs needed to prepare the asset for use when those costs belong in the asset's recorded basis. Raising original cost increases the depreciable base, periodic expense, and book values.
- Salvage value is required and cannot exceed original cost. It represents the estimated amount left at the end of the useful life. A higher salvage value reduces total depreciation; a lower value increases it. Setting salvage equal to cost produces no depreciable amount, so the charts switch to a compact no-change message.
- Useful life is required as a whole number from 1 to 100 years. It is the period over which the asset is expected to provide economic benefit. Do not confuse physical durability with the accounting estimate: obsolescence, maintenance patterns, contractual limits, and expected replacement cycles may shorten the useful life.
- End book value after is the snapshot year and may range from 0 to the useful life. Year 0 shows the original cost before depreciation. Year 1 shows the first annual charge and ending book value. The selected row is highlighted in the schedule.
Understand the results
Depreciation expense is the charge for the selected year. Under straight-line it remains constant. Under declining balance and sum-of-years-digits it is generally higher early and lower later. A zero value at year 0 is normal because no annual period has elapsed.
End book value is original cost less accumulated depreciation through the selected year. It is an accounting carrying amount, not necessarily the asset's market price. The model does not allow book value to fall below salvage value.
Accumulated depreciation is the total expense recognized from year 1 through the selected snapshot. At the end of the useful life it equals original cost minus salvage value.
The fourth result card reports a method-specific rate or weighting. Straight-line shows the annual share of the depreciable base. Declining balance shows the derived percentage applied to opening book value. Sum-of-years-digits shows the selected year's fraction of the digits denominator.
How the formulas work
For declining balance, the rate is calculated as one minus the nth root of salvage value divided by original cost. Each year's expense equals opening book value multiplied by that rate. For sum-of-years-digits, the denominator is useful life multiplied by useful life plus one, divided by two. Year-one expense uses the largest remaining-life numerator; each following year reduces that numerator by one.
Read the visuals and tables
The asset-value bar cross-checks the selected snapshot. Its three components—accumulated depreciation, remaining depreciable value, and salvage floor—always add back to original cost. The line chart compares book-value timing across all three methods. The visible comparison table contains the exact values plotted by the chart, while the selected-method schedule shows opening value, annual expense, accumulated depreciation, and ending value for every year.
Use the Excel download to preserve the current assumptions and schedules. The workbook includes Summary, Inputs, Schedule, Comparison, and Notes sheets. Because it is generated from the same calculation model as the page, changing any input before downloading changes the exported figures.
Practical interpretation and common mistakes
Depreciation method changes the timing of expense, not the total depreciable amount. Accelerated methods can make early-period profit appear lower and later-period profit higher relative to straight-line, but the asset still ends at the same salvage value in this model. Common mistakes include using market value as book value, entering salvage above cost, extending the snapshot beyond useful life, and assuming a tax depreciation method is automatically acceptable for financial reporting.
Rules vary by jurisdiction and reporting framework. For U.S. federal tax context, consult IRS Publication 946. For international financial-reporting principles on property, plant, and equipment, review IAS 16. A general conceptual overview is also available from Investopedia's depreciation guide. Confirm the method, useful life, residual value, and tax treatment with a qualified professional for real filings.