Depreciation Calculator

Use this depreciation calculator to spread an asset’s cost over time and get a period-by-period schedule that shows depreciation expense, accumulated depreciation, and ending book value. Book value is an accounting number (not the market price), so the schedule is mainly for records and learning.

How to use our Depreciation Calculator

1. Enter the asset cost (USD) and salvage value (USD).
2. Enter the useful life (years).
3. Choose the depreciation method (straight-line, declining balance, sum-of-years-digits, or units-of-production).
4. Pick a schedule frequency (Yearly or Monthly) based on how you want the table shown.
5. If needed, open Advanced options and set months in service for the first year to prorate the first period (supported methods only).
6. If you chose a declining balance method, set the accelerated factor (percent), like 200 for double-declining balance.
7. If you chose units-of-production, enter estimated lifetime units and the units for each period you want shown.
8. Choose rounding (decimal places) for the schedule display.
9. Click Calculate and review the notes if any values are capped or if your units list only covers part of the life.

Definitions

Depreciation: Spreading an asset's cost over the time you use it as an expense instead of expensing it all at once.[2]

Asset cost: What you paid for the asset, including costs needed to get it ready to use.

Salvage value (residual value): What you expect the asset to be worth at the end of its useful life.

Useful life: How long you expect to use the asset, measured in years in this calculator.[2]

Depreciable base: The total amount you can depreciate, which is cost minus salvage.

Book value: The asset's cost minus accumulated depreciation; it is an accounting value, not a resale price.[2]

Accumulated depreciation: Total depreciation recorded so far (a running total).

Straight-line method: Depreciates the same amount each period.

Declining balance method: Depreciates a fixed percent of the starting book value each period, so it is higher earlier and lower later.

Double-declining balance (DDB): A common declining balance approach that uses a 200% factor (twice straight-line rate).

Sum-of-years-digits (SYD): An accelerated method that uses a fraction based on remaining life divided by the sum of years.[2]

Units-of-production (UOP): Depreciation based on actual usage (like miles or machine hours) instead of time.[2]

Placed in service: When the asset is ready and available to be used; important for tax rules and forms like Form 4562.[1]

Methodology

Inputs and period setup

Schedule frequency controls the period length: Yearly uses years, Monthly uses months.

depreciable_base = cost - salvage

If depreciable_base is less than or equal to 0, depreciation is set to 0 for all shown periods and book value stays at cost.

For Monthly schedules, the calculator converts useful life in years to months and requires it to convert cleanly to a whole number of months.

life_months = life_years * 12

Common schedule columns (every method)

Each period shows starting book value, depreciation for the period, accumulated depreciation, and ending book value.

accum_depr_t = sum(dep_1 .. dep_t)

end_book_value_t = cost - accum_depr_t

For accelerated and usage-based methods, depreciation is capped so the ending book value never goes below salvage.

dep_t = min(requested_dep_t, start_book_value_t - salvage)

Straight-line (SL)

Straight-line spreads the depreciable base evenly over the full life.[2]

dep_per_year = (cost - salvage) / life_years

dep_per_month = (cost - salvage) / life_months

If you enter months in service in the first year (1 to 12), the first period is prorated for straight-line, then the remaining periods continue at the normal per-month amount.

dep_period_1 = dep_per_month * months_in_service

Declining balance (including DDB)

Declining balance uses a fixed rate applied to the starting book value each period.[2][3]

rate_per_year = (factor_percent / 100) / life_years

rate_per_month = rate_per_year / 12

requested_dep_t = start_book_value_t * rate_per_period

Double-declining balance is the same calculation with factor_percent = 200.

Sum-of-years-digits (SYD)

SYD is an accelerated method that allocates more depreciation earlier using a decreasing numerator and a fixed denominator.[2]

syd_denominator = life_years * (life_years + 1) / 2

remaining_life_years_t = life_years - (t - 1)

dep_year_t = (remaining_life_years_t / syd_denominator) * (cost - salvage)

Units-of-production (UOP)

UOP ties depreciation to actual usage. You enter total estimated lifetime units and the units for each period you want shown.[2]

dep_per_unit = (cost - salvage) / total_units

requested_dep_t = dep_per_unit * units_in_period_t

If you provide units for only a few periods, the schedule shows only those periods and reports total depreciation for the shown rows.

Rounding and last-line adjustment

The calculator keeps higher precision internally, but displays values using your chosen decimal places. If rounding would cause the final displayed ending book value to miss the salvage value by a small amount, it adjusts the last displayed depreciation line so the final displayed book value equals salvage.

Important note on taxes vs book depreciation

This calculator is for general (book) depreciation methods commonly taught in accounting.[2] US tax depreciation (like MACRS, reported on forms such as Form 4562) can follow different rules and conventions.[1]

Sources