Depreciation allocates the cost of a tangible asset over its useful life. This calculator builds straight-line, declining balance, and double declining balance schedules for equipment, vehicles, and other capital assets.
How to use this calculator
- Enter the asset's original cost.
- Set useful life in years.
- Enter expected salvage (residual) value at end of life.
- Choose a depreciation method. Declining balance derives its rate automatically from cost, salvage, and useful life.
- Review the depreciation schedule, calculated rate (if applicable), book value trend, and accounting guidance.
Formula
Straight-line: (Cost − Salvage) ÷ Useful life each year. Declining balance: rate = 1 − (Salvage ÷ Cost)^(1 ÷ Useful life); each year expenses beginning book value × rate until salvage. Double declining balance: Book value × (2 ÷ Useful life) each year, capped at salvage value.
Example
A $50,000 asset with 5-year life and $5,000 salvage depreciates $9,000 per year under straight line. Declining balance calculates a rate of about 36.9% and reaches $5,000 book value by year 5.
Frequently asked questions
What is straight-line depreciation?
An equal expense each year over the asset's useful life. Simple and widely used for book accounting.
How is the declining balance rate calculated?
The rate is derived from asset cost, salvage value, and useful life — not entered manually. It is designed so book value reaches salvage at the end of useful life.
When is double declining balance used?
When an asset loses value faster early in its life (technology, vehicles). It accelerates expense in the first years and may not reach salvage within useful life.
Is this the same as tax depreciation (MACRS)?
No. U.S. tax depreciation follows IRS tables (MACRS, Section 179). This calculator models common book methods for planning.
What is salvage value?
The estimated residual value at the end of useful life. Depreciation stops when book value reaches salvage.