Depreciation Calculator

Depreciation spreads the cost of a tangible asset over its useful life, matching expenses with the revenue it generates. The two most common methods are straight-line (equal depreciation each year) and declining balance (accelerated depreciation, higher in early years). Use this calculator to determine your asset's book value over time.

How to Use This Tool

Enter the original cost of the asset.
Enter the estimated salvage/residual value at the end of its useful life.
Enter the useful life in years.
Select the depreciation method (1 = straight-line, 2 = declining balance).
Click Calculate to see the annual depreciation and book value schedule.

The Formula

Straight-line: Depreciation = (Cost - Salvage Value) / Useful Life. Declining balance: Depreciation = Book Value x (2 / Useful Life) each year, reducing the book value until it reaches the salvage value.

Why It Matters

Your small business buys $25,000 equipment with a $5,000 salvage value and 7-year useful life. For taxes, you choose between straight-line ($2,857/year) for steady deductions versus declining balance ($7,143 in year 1) for larger front-loaded tax write-offs. Use this to compare the impact on your book values each year.

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