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Depreciation Calculator

Depreciation Expense (2026)

$9,000.00

The Numbers

  • Accumulated depreciation: $9,000.00
  • Book value: $41,000.00
View Full Depreciation Schedule
YearDepreciation ExpenseAccumulated DepreciationBook Value
2026$9,000.00$9,000.00$41,000.00
2027$9,000.00$18,000.00$32,000.00
2028$9,000.00$27,000.00$23,000.00
2029$9,000.00$36,000.00$14,000.00
2030$9,000.00$45,000.00$5,000.00

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Disclaimer

This calculator provides estimates for informational purposes only and does not constitute financial, medical, legal, or tax advice. Always consult a qualified professional about your specific situation.

How This Calculator Works

Depreciation spreads the cost of a business asset over its useful life, reflecting how the asset loses value over time. Enter what the asset cost, what it’ll be worth at the end of its useful life (salvage value), and how many years it’ll be in service, and this calculator builds a full year-by-year depreciation schedule under either of the two most common methods.

  • Straight-line spreads the depreciable amount evenly across every year — the simplest method, and the default for financial reporting.
  • Double-declining balance is an “accelerated” method: a larger share of the expense is booked in the early years and less in later years, which more closely matches how some assets (like vehicles or computers) actually lose value fastest when new.

The Formula

Straight-line:

Annual Depreciation=Cost−Salvage ValueUseful Life\text{Annual Depreciation} = \frac{\vA{\text{Cost}} - \vB{\text{Salvage Value}}}{\vC{\text{Useful Life}}}

The same amount every year.

Declining balance:

Depreciation Expense=Book Value×d,d=FactorUseful Life\text{Depreciation Expense} = \text{Book Value} \times \vD{d}, \qquad \vD{d} = \frac{\text{Factor}}{\vC{\text{Useful Life}}}

Applied to whatever book value remains each year (not the original cost) — capped so book value never dips below Salvage Value\vB{\text{Salvage Value}}. A factor of 2 (double-declining) is the most common choice.

Worked Example

A $50,000\vA{\$50{,}000} asset with a $5,000\vB{\$5{,}000} salvage value and a 5-year\vC{5\text{-year}} useful life, reporting on year 3:

Straight-line:

  1. Annual depreciation: (50,000−5,000)÷5=9,000(\vA{50{,}000} - \vB{5{,}000}) \div \vC{5} = 9{,}000 per year, every year.
  2. Accumulated depreciation after 3 years: 9,000×3=27,0009{,}000 \times 3 = 27{,}000.
  3. Book value after 3 years: 50,000−27,000=23,00050{,}000 - 27{,}000 = 23{,}000.

Double-declining balance:

  1. Rate: d=2÷5=0.4\vD{d} = 2 \div \vC{5} = 0.4.
  2. Year 1 books 50,000×0.4=20,000\vA{50{,}000} \times \vD{0.4} = 20{,}000, dropping book value to $30,000.
  3. Year 2 books 30,000×0.4=12,00030{,}000 \times \vD{0.4} = 12{,}000, dropping book value to $18,000.
  4. Year 3 books 18,000×0.4=7,20018{,}000 \times \vD{0.4} = 7{,}200, leaving a book value of 10,80010{,}800 — noticeably more depreciation booked earlier than straight-line’s flat $9,000/year.

Source: Standard straight-line and declining-balance depreciation methods.

Frequently Asked Questions

Which depreciation method should I use?

Straight-line is the simplest and most common for financial reporting, spreading the expense evenly. Declining balance books more expense early, which can better match how some assets (vehicles, computers, equipment) actually lose value fastest when new. Tax depreciation rules (like MACRS in the U.S.) often use their own specific schedules — check with a tax professional or your local tax authority for what applies to your situation.

What is salvage value?

The estimated value the asset will still have at the end of its useful life — what you could sell it for, or its scrap value. An asset that will be worthless when retired has a salvage value of $0, in which case its full cost gets depreciated over its useful life.

Why does the declining-balance method never quite reach zero?

Because each year's expense is a percentage of whatever book value REMAINS, the raw formula would keep shrinking forever without ever hitting exactly zero. This calculator caps the final year's expense so the book value lands exactly at the salvage value instead of drifting below it or never reaching it.