Asset Management

Depreciation
Calculator

Calculate asset depreciation using 4 accounting methods — with full year-by-year schedule, visual chart, and method comparison.

Methods

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Year 1 Dep.

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Useful Life

Select Depreciation Method

📏

Straight-Line

Linear

📉

Double Declining

DDB

Accelerated

🔢

Sum-of-Years

SYD

Accelerated

⚙️

Units of Production

UOP

Usage-Based

Asset Details

Asset Cost

Salvage Value

Useful Life

yrs

Total Units Expected (Lifetime)

Units Used This Period

Round to dollars?

Yes No

Partial year?

No Yes

First Year Fraction (0–1)

📊 Depreciation Schedule Chart

Compare all methods:

📋 Depreciation Schedule

Year	Dep. Expense	Accum. Dep.	Book Value

What is Depreciation?

Depreciation is the accounting process of allocating the cost of a tangible asset over its useful life. Instead of expensing the full cost of an asset in the year of purchase, businesses spread the cost over the years the asset is expected to generate value. This matches expenses to the revenues they help produce — a core principle of accrual accounting.

The 4 Depreciation Methods

📏

Straight-Line (SL)

Equal depreciation every year. Simple and most commonly used for buildings, furniture, and office equipment.

📉

Double Declining Balance (DDB)

Accelerated method — higher depreciation early, lower later. Good for technology assets that lose value quickly.

🔢

Sum-of-Years'-Digits (SYD)

Accelerated but smoother than DDB. Uses a fraction based on remaining life over sum of all years.

⚙️

Units of Production (UOP)

Depreciation tied to actual usage. Ideal for machinery where wear depends on how much it's used.

Key Formulas

SL: Annual Dep = (Cost − Salvage) / Useful Life

DDB: Annual Dep = Book Value × (2 / Useful Life)

SYD: Annual Dep = (Cost − Salvage) × (Remaining Life / SYD)
where SYD = n(n+1)/2

UOP: Dep per Unit = (Cost − Salvage) / Total Units
Period Dep = Dep per Unit × Units Used

Frequently Asked Questions

Which depreciation method is best for tax purposes?

Accelerated methods like DDB reduce taxable income more in early years, which can improve cash flow. However, tax rules vary by jurisdiction — many countries have their own prescribed depreciation rates (e.g. MACRS in the US). Consult a tax advisor for your specific situation.

What is salvage value?

Salvage value (also called residual value) is the estimated value of an asset at the end of its useful life. For example, a machine costing $50,000 might be worth $5,000 as scrap after 10 years. Depreciation is calculated on the depreciable base (cost minus salvage value).

What is partial year depreciation?

When an asset is purchased mid-year, you only depreciate it for the portion of the year it was in service. A common convention is the half-year convention (fraction = 0.5), meaning you take half the normal depreciation in both the first and last year.

Can book value go below salvage value?

No — depreciation stops once the book value reaches the salvage value. With DDB especially, you may need to switch to straight-line in later years to avoid depreciating below salvage value. Our calculator handles this automatically.

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