Depreciation Calculator
Enter an asset's purchase cost, estimated salvage value (the value at the end of its useful life), and the useful life in years to see the annual depreciation expense under two common methods: straight-line and declining balance. A year-by-year schedule shows the depreciation charge and remaining book value for each year.
Straight-line depreciation spreads the cost evenly across the useful life — the simplest and most widely used method. Declining balance (double-declining) front-loads the depreciation, with larger charges in the early years and smaller ones later, which is closer to how many assets actually lose value.
This calculator is useful for accounting, tax planning, and financial analysis — helping you estimate depreciation deductions and understand how an asset's book value changes over time.
By The Paper Room Editorial Team — Calculator Tools
Frequently asked questions
What is the difference between straight-line and declining balance?▼
Straight-line spreads the depreciation evenly — the same amount each year. Declining balance (specifically double-declining) applies a fixed percentage to the remaining book value each year, so depreciation is highest in year one and decreases annually. Declining balance better reflects assets that lose value quickly early on, like vehicles and electronics.
What is salvage value?▼
Salvage value (also called residual value) is the estimated amount the asset will be worth at the end of its useful life. It is the minimum value below which the asset is not depreciated. If you expect to dispose of the asset with no resale value, set salvage value to zero.
Which method should I use for taxes?▼
Tax authorities in most countries prescribe specific depreciation methods and rates. In the US, the IRS uses MACRS (Modified Accelerated Cost Recovery System) which has its own schedules. Consult a tax professional for the method applicable to your asset class and jurisdiction.