Depreciation Calculator
Calculate asset depreciation using straight-line, declining balance, or sum-of-years methods
How Depreciation Works
Depreciation is the allocation of an asset's cost over its useful life for accounting and tax purposes.
It reflects the decrease in value of an asset due to wear, tear, obsolescence, or other factors.
Different methods can be used depending on the asset type and business requirements.
Depreciation Methods
Straight-Line: Equal depreciation each year
Formula: (Cost - Salvage Value) ÷ Useful Life
Formula: (Cost - Salvage Value) ÷ Useful Life
Declining Balance: Higher depreciation in early years
Formula: Book Value × Declining Rate
Formula: Book Value × Declining Rate
Sum-of-Years: Accelerated depreciation method
Formula: (Remaining Life ÷ Sum of Years) × Depreciable Base
Formula: (Remaining Life ÷ Sum of Years) × Depreciable Base
Depreciation Tips
- Choose the method that best matches asset usage patterns
- Consider tax implications of different methods
- Review useful life estimates periodically
- Keep detailed records for tax purposes
- Consult with an accountant for complex assets