Calculate depreciation on an asset
Calculating depreciation means dividing an asset's depreciable cost (its purchase price minus its salvage value) across its useful life. The Depreciation Calculator computes this for any method and produces a schedule showing the expense each year and the declining book value.
Three inputs drive every method: the cost (what the asset was bought for), the salvage value (what it will be worth at the end of its life), and the useful life in years. The difference between cost and salvage is the depreciable base, the total amount that will be written off. For a $10,000 machine with a $1,000 salvage value, $9,000 depreciates over its life regardless of method; only the yearly split changes.
Businesses depreciate assets to match an expense to the periods that benefit from the asset and to reflect its falling value on the books. QuickCalculators makes the choice of method concrete by showing exactly how each one distributes that $9,000 across the years.
Depreciate with the straight-line method
The straight-line method spreads depreciation evenly, charging the same expense every year of the asset's life. The Depreciation Calculator computes it by dividing the depreciable base by the useful life. The formula is (cost - salvage) / useful life. For the $10,000 machine with $1,000 salvage over 5 years, straight-line depreciation is $9,000 / 5 = $1,800 every year.
The book value falls by $1,800 annually, from $10,000 to $1,000 at the end of year five. This even, predictable pattern makes straight-line the most widely used method.
Straight-line suits assets that lose value steadily and are used evenly over their life. QuickCalculators shows the flat $1,800 expense each year and the straight decline in book value, the simplest of the depreciation patterns.
Depreciate with the declining balance method
The declining balance method front-loads depreciation, charging more in the early years by applying a fixed rate to the shrinking book value. The Depreciation Calculator computes each year's expense as the rate times the remaining book value. Instead of a flat amount, declining balance applies a percentage to the book value, which falls each year, so the expense falls too.
Because the rate hits a larger balance early, most of the depreciation lands in the first years. The method never takes the book value below salvage; the final year is adjusted so the asset ends at exactly its salvage value.
Declining balance suits assets that lose most of their value early, like vehicles and technology. QuickCalculators shows the larger early expenses tapering off, the signature of an accelerated method, with the book value approaching salvage.
Use double declining balance
Double declining balance is the most common accelerated method, applying twice the straight-line rate to the book value each year. The Depreciation Calculator computes the rate as 2 divided by the useful life. For a 5-year asset, the straight-line rate is 20% (one-fifth per year), so the double declining rate is 40%.
Year one takes 40% of the full $10,000 = $4,000, year two takes 40% of the remaining book value, and so on, each year's expense smaller than the last. Like all declining methods, it stops at salvage value rather than going below it.
Double declining front-loads depreciation heavily, which suits assets most productive when new. QuickCalculators shows the steep early expenses ($4,000 in year one against straight-line's $1,800) and the rapid fall in book value that follows.
Use the sum-of-years-digits method
The sum-of-years-digits method is an accelerated method that weights depreciation by the asset's remaining life. The Depreciation Calculator computes each year's fraction from the sum of the life's digits. For a 5-year asset, the digits 1 through 5 sum to 15.
Year one uses the fraction 5/15 (the most remaining life), year two 4/15, down to 1/15 in the final year. Each fraction multiplies the depreciable base, so year one takes 5/15 × $9,000 = $3,000. The method accelerates depreciation like declining balance, but less aggressively, and lands exactly on salvage without adjustment.
Sum-of-years-digits offers a middle path between straight-line and double declining. QuickCalculators shows the descending fractions and the expenses they produce, another accelerated pattern with its own distinct curve.
Depreciate by units of production
The units-of-production method ties depreciation to use rather than time, charging expense in proportion to output. The Depreciation Calculator computes a per-unit rate and applies it to the units used each period. The per-unit rate is the depreciable base divided by the total expected units over the asset's life.
For a $9,000 base and 90,000 expected units, each unit depreciates $0.10. A year producing 20,000 units depreciates $2,000; a slower year producing 10,000 units depreciates $1,000. The expense follows usage, not the calendar, so a heavily used year costs more than a light one.
Units of production suits machinery whose wear depends on output rather than age. QuickCalculators shows the expense varying with the units entered for each period, the only method where the schedule depends on use rather than time.
Read the depreciation schedule
The depreciation schedule lists, for each year, the depreciation expense, the accumulated depreciation, and the remaining book value. The Depreciation Calculator produces this schedule for whichever method is chosen, making the pattern visible.
Each row shows one period: the expense charged that year, the running total of depreciation to date, and the book value that remains (cost minus accumulated depreciation).
The book value starts at the full cost and ends at the salvage value, never dropping below it. Reading down the schedule shows the method's shape: flat for straight-line, steep-then-shallow for the accelerated methods, variable for units of production.
The schedule is where the method's behaviour becomes concrete, turning a formula into a year-by-year plan. QuickCalculators lets methods be compared by switching the mode selector, so the same asset's schedules under straight-line and double declining sit one click apart.
Read the disclaimer
QuickCalculators labels depreciation results as estimates for information only. The Depreciation Calculator is not tax, accounting or investment advice. Confirm tax depreciation with current rules and a qualified professional before filing.
Correct a common misconception: each method depreciates a different total
Each method does not depreciate a different total. Every method writes off the same depreciable base (cost minus salvage) over the asset's life. Methods differ only in timing. The Depreciation Calculator shows that shared total by ending every schedule at salvage value.
Frequently asked questions
How is depreciation calculated?
Depreciation is calculated by spreading an asset's cost minus its salvage value across its useful life, using a chosen method. Straight-line divides evenly; declining balance and sum-of-years accelerate it; units of production ties it to output. The Depreciation Calculator applies any method and shows the year-by-year schedule.
What is straight-line depreciation?
Straight-line depreciation charges the same expense every year, calculated as (cost - salvage value) / useful life. For a $10,000 asset with $1,000 salvage over 5 years, it depreciates $1,800 annually. It is the simplest and most common method, suited to assets that lose value evenly. The Depreciation Calculator computes it with a full schedule.
What is the difference between the declining balance methods?
Declining balance methods apply a fixed rate to the shrinking book value, front-loading depreciation. Double declining uses twice the straight-line rate (the most accelerated); other declining variants use other rates. All charge more early and less later, and none goes below salvage value. The Depreciation Calculator offers double declining as a selectable mode.
What is salvage value?
Salvage value is the estimated worth of an asset at the end of its useful life, what it could be sold or scrapped for. Depreciation applies only to the cost above salvage, so the depreciable base is cost minus salvage. The book value never falls below salvage. The Depreciation Calculator uses it as a required input.
Which depreciation method should be used?
The best method depends on how the asset loses value: straight-line for even loss, declining balance or sum-of-years for assets that lose most value early (vehicles, technology), and units of production for assets whose wear tracks output (machinery). Tax rules may require a specific method. The Depreciation Calculator lets methods be compared.
Do all depreciation methods total the same amount?
Yes. Every method depreciates the same total, the cost minus the salvage value, over the asset's life. They differ only in timing: accelerated methods charge more early and less later, while straight-line charges evenly. The Depreciation Calculator shows this by letting methods be compared, with each reaching the same accumulated total.
Summarize the Depreciation Calculator
The Depreciation Calculator spreads an asset's cost, minus salvage value, across its useful life, and shows the year-by-year expense and book value for any method. Straight-line divides the depreciable base evenly; declining and sum-of-years methods front-load expense; units of production follows output.
QuickCalculators keeps every schedule exact to the cent and labels the result as an estimate that needs professional tax confirmation.