The Depreciation Calculator works out yearly depreciation of an asset using the straight-line, declining balance or sum-of-the-years'-digits method, with a full schedule.
Straight Line depreciation over 5 years
| First-year depreciation | $2,000.00 |
| Total depreciation | $10,000.00 |
| Book value at end | $1,000.00 |
Depreciation spreads the cost of a long-lasting asset such as a machine, vehicle or computer over the years it is used, instead of counting it all as an expense in the year it was bought. It matches costs to the income the asset helps earn and lowers taxable profit each year.
The simplest method charges the same amount every year: (cost − salvage value) ÷ useful life. For an $11,000 asset with $1,000 salvage value over 5 years, that is $2,000 a year.
An accelerated method that charges a fixed percentage of the remaining book value each year: book value × factor ÷ life. With a factor of 2 (double declining balance), the first year above is $11,000 × 2 ÷ 5 = $4,400. Because a percentage never reaches the salvage value, the calculator switches to straight line when that gives more, and stops at salvage value.
Another accelerated method. Add the years (5+4+3+2+1 = 15) and charge (remaining life ÷ 15) of the depreciable amount each year: 5/15 × $10,000 = $3,333.33 in year one, then 4/15, and so on.
In the U.S., tax depreciation usually follows MACRS, which uses set recovery periods and conventions (half-year, mid-quarter, mid-month) and may allow bonus depreciation or Section 179 expensing. Accounting (book) depreciation and tax depreciation often differ.
Can land be depreciated? No, land does not wear out.
Which method is best? Accelerated methods give bigger deductions early; straight line is simpler and steady.
What is book value? Cost minus accumulated depreciation.