Which depreciation method should I use?

Straight-line is the simplest and most widely accepted for financial reporting. Declining-balance and double-declining-balance front-load depreciation expense and are common for assets that lose value quickly. Sum-of-years-digits is another accelerated method. For US tax purposes, follow the IRS MACRS tables in Publication 946.

What is salvage value?

Salvage value (also called residual value) is the estimated amount the asset will be worth at the end of its useful life. It limits how far the asset can be depreciated: the book value should not fall below salvage value.

How does double-declining balance work?

Double-declining balance applies a rate of 2/n (where n is useful life) to the asset's current book value each year. Because depreciation shrinks as book value shrinks, this method front-loads expense in the early years.

Does this match my tax return?

Not necessarily. Tax depreciation follows jurisdiction-specific rules (e.g., MACRS in the US, capital allowances in the UK) that use prescribed lives and conventions. This calculator illustrates the textbook formulas; consult a qualified accountant for filings.

Depreciation Calculator

Free depreciation calculator supporting straight-line, declining-balance, double-declining-balance, and sum-of-years-digits methods. Enter the asset cost, salvage value, useful life, and method to get a complete year-by-year schedule (opening value, depreciation, closing value), total depreciation, and ending book value.

Calculate annual depreciation, book value, and a year-by-year schedule using four standard methods.