How to Calculate Depreciation
What is Depreciation?
Depreciation allocates the cost of an asset over its useful life. The method chosen affects annual expense, book value, and tax treatment.
Step-by-Step Guide
- 1Straight-line: (Cost − Salvage) / Useful life per year
- 2Declining balance: Book value × fixed rate per year
- 3Sum-of-years digits: accelerated front-loaded method
- 4All methods write off the same total depreciable amount
Worked Examples
Frequently Asked Questions
What is Depreciation?
Depreciation allocates the cost of an asset over its useful life. The method chosen affects annual expense, book value, and tax treatment
How accurate is the Depreciation calculator?
The calculator uses the standard published formula for depreciation. Results are accurate to the precision of the inputs you provide. For financial, medical, or legal decisions, always verify with a qualified professional.
What units does the Depreciation calculator use?
This calculator works with inches. You can enter values in the units shown — the calculator handles all conversions internally.
What formula does the Depreciation calculator use?
The calculator applies the standard formula for this type of calculation. See the 'How It Works' steps above for the detailed formula breakdown.