Depreciation Calculator

Estimate depreciation using straight-line, declining-balance, SYD, or units-of-production methods and review schedule impacts.

Depreciation calculator

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What is depreciation?

Depreciation is the systematic allocation of the cost of a tangible asset over its useful life. Instead of expensing the full purchase price in the year you buy the asset, you spread the cost over the years that benefit from using it. This improves the matching of expenses with revenue and is required by accounting standards and many tax rules.

Common depreciable assets include machinery, vehicles, computers, furniture, and buildings. Land is usually not depreciated because it does not wear out in the same way.

Depreciation methods supported

Straight-line depreciation

Straight-line depreciation spreads the depreciable cost evenly over the asset’s useful life. It is the simplest and most widely used method for financial reporting when the asset provides equal benefit each year.

Depreciable base = Cost − Salvage value
Annual depreciation = (Cost − Salvage value) ÷ Useful life (years)

Double-declining balance (200% DB)

Double-declining balance is an accelerated method that expenses more in the early years and less later. It applies a fixed rate (twice the straight-line rate) to the book value at the beginning of each year.

Straight-line rate = 1 ÷ Useful life
DDB rate = 2 × Straight-line rate
Depreciation (year n) = Beginning book value × DDB rate
Book value is never allowed to fall below salvage value.

150% declining balance

The 150% declining balance method is similar to double-declining balance but less aggressive. It uses 1.5 times the straight-line rate, providing moderate acceleration.

150% DB rate = 1.5 × (1 ÷ Useful life)
Depreciation (year n) = Beginning book value × 150% DB rate

Sum-of-the-years’-digits (SYD)

SYD is another accelerated method. It assigns a fraction of the depreciable base to each year, with larger fractions in earlier years.

SYD = n(n + 1) ÷ 2, where n = useful life in years
Depreciation (year k) = (Remaining life in year k ÷ SYD) × (Cost − Salvage)

Units of production

Units of production ties depreciation to actual usage, such as machine hours, miles driven, or units produced. This is useful when wear and tear depend more on usage than on time.

Depreciation per unit = (Cost − Salvage) ÷ Total expected units
Depreciation (period) = Depreciation per unit × Units produced in period

Worked example

Suppose you buy a machine for $25,000, expect to sell it for $5,000 after 5 years, and choose straight-line depreciation.

  • Cost = $25,000
  • Salvage value = $5,000
  • Useful life = 5 years
  • Depreciable base = 25,000 − 5,000 = $20,000
  • Annual depreciation = 20,000 ÷ 5 = $4,000 per year

After 5 years, accumulated depreciation is $20,000 and the book value equals the salvage value of $5,000.

Tips for using the depreciation calculator

  • Use straight-line for simple budgeting and most financial reporting.
  • Use accelerated methods (DDB or 150% DB) when you want higher expenses in early years.
  • Use units of production when asset wear depends on usage, not just time.
  • Always check your local tax rules (e.g., MACRS in the U.S.) before filing returns.

Frequently asked questions

About the author

Ugo Candido builds financial tools and educational resources to help readers make better money decisions. He focuses on practical, transparent models that reflect how lenders calculate payments and total cost of ownership.

Contact: info@calcdomain.com

Editorial policy

CalcDomain content is created for educational purposes and is reviewed for clarity, accuracy, and transparency. We do not accept paid placements that influence calculator outputs. Inputs and assumptions are shown directly in the interface so you can verify how results are produced.

Methodology

Results use standard formulas and the values you provide. Figures are estimates and may differ from lender quotes. For decisions that require professional guidance, consult a licensed advisor.

Sources

Inputs used by this calculator

    Consistency checks

    Checks: non-negative values, plausible ranges, coherent outputs.

    Operational notes

    Fill in realistic values and keep units and timeframes consistent.

    Key entities: Depreciation.

    Inputs used by this calculator

      Consistency checks

      Checks: non-negative values, plausible ranges, coherent outputs.