Depreciation calculator
Yearly depreciation and book value using straight-line, declining-balance or sum-of-the-years’-digits.
About the depreciation calculator
Yearly depreciation and book value using straight-line, declining-balance or sum-of-the-years’-digits.
Part of SmartCalcy’s business & shopping tools. It runs in your browser with no account, uses your own currency and units (change them at the top of the page), and gives estimates for information only, so check official guidance before you rely on a result.
How to use the depreciation calculator
What it calculates and when to use it
Spreads the cost of an asset over its useful life using straight-line, declining-balance or sum-of-the-years’-digits depreciation, with the book value each year.
How to use it, step by step
- Enter the cost, the salvage value and the useful life.
- Choose a method; for declining balance choose the factor.
- Read the year-by-year schedule.
What each input means
- Salvage value – What the asset is expected to be worth at the end.
- Factor – 2 means double-declining balance.
How to read the results
- Depreciation – The expense each year.
- Accumulated – The total depreciation so far.
- Book value – Cost minus accumulated depreciation.
The formula
Straight-line = (cost − salvage) ÷ life. Declining balance = book value × factor ÷ life, never below salvage. Sum of years’ digits = (cost − salvage) × remaining life ÷ (n × (n + 1) ÷ 2).
A worked example
A 20,000 asset with a 2,000 salvage value and a 5-year life depreciates 3,600 a year on a straight-line basis, ending at a book value of 2,000.
Assumptions and limits
- Accounting depreciation. Tax rules (capital allowances, MACRS) use their own schedules.
Common mistakes
- Depreciating below salvage value.
- Using accounting depreciation for tax returns.
Frequently asked questions
Which method is best?
Straight-line is simplest. Accelerated methods front-load the expense for assets that lose value quickly.
Related tools
Details
- Method
- Straight-line
- Total depreciation
- £18,000
- Final book value
- £2,000
Schedule
| Year | Depreciation | Accumulated | Book value |
|---|---|---|---|
| 1 | £3,600 | £3,600 | £16,400 |
| 2 | £3,600 | £7,200 | £12,800 |
| 3 | £3,600 | £10,800 | £9,200 |
| 4 | £3,600 | £14,400 | £5,600 |
| 5 | £3,600 | £18,000 | £2,000 |