Calculate asset depreciation using straight-line, double declining balance, or sum-of-years-digits methods. View a complete depreciation schedule showing annual expense and remaining book value.
Original purchase price
Estimated value at end of life
Total Depreciation
$45,000.00
Final Book Value
$5,000.00
| Year | Depreciation | Accumulated | Book Value |
|---|---|---|---|
| 1 | $9,000.00 | $9,000.00 | $41,000.00 |
| 2 | $9,000.00 | $18,000.00 | $32,000.00 |
| 3 | $9,000.00 | $27,000.00 | $23,000.00 |
| 4 | $9,000.00 | $36,000.00 | $14,000.00 |
| 5 | $9,000.00 | $45,000.00 | $5,000.00 |
Year 1
18.0% of cost
$9,000.00
Year 2
18.0% of cost
$9,000.00
Year 3
18.0% of cost
$9,000.00
Year 4
18.0% of cost
$9,000.00
Year 5
18.0% of cost
$9,000.00
Straight-Line
$9,000.00
Year 1 depreciation
Pattern: Equal amounts each year
Best for: Stable, predictable assets
Currently selected
Double Declining Balance
$20,000.00
Year 1 depreciation
Pattern: Front-loaded, decreasing
Best for: Tech, vehicles, fast-depreciating
Sum-of-Years-Digits
$15,000.00
Year 1 depreciation
Pattern: Accelerated, gradual decrease
Best for: Equipment with early productivity
Depreciation allocates the cost of a tangible asset over its useful life. Businesses use depreciation to match the cost of an asset to the revenue it generates, which also provides tax benefits. The three most common methods are straight-line (equal annual amounts), double declining balance (accelerated, higher in early years), and sum-of-years-digits (also accelerated, but less aggressive than declining balance). Each method produces a different depreciation schedule, affecting both your financial statements and tax liability.
Depreciation is the systematic allocation of an asset's cost over its useful life. It reflects the decline in value of tangible assets like equipment, vehicles, and buildings due to wear, age, or obsolescence.
Straight-line depreciation spreads the cost evenly across each year of the asset's useful life. Annual depreciation equals (cost minus salvage value) divided by the useful life in years. It's the simplest and most commonly used method.
Double declining balance is an accelerated method that front-loads depreciation expense. It's useful for assets that lose value quickly in early years, such as vehicles and technology equipment.
Salvage value (also called residual value) is the estimated amount the asset will be worth at the end of its useful life. It represents what you could sell or scrap the asset for after it's fully depreciated.
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