Depreciation Calculator

How this result is built

Schedule straight-line or declining-balance depreciation down to a salvage value.

Straight line spreads the depreciable base, cost minus salvage, evenly across the useful life. Declining balance applies a percent of the remaining book value each year and stops at salvage so the asset is not written below the value you expect to recover.

What the opening example is for

Tax depreciation systems such as MACRS use statutory lives and conventions this schedule does not copy. Use this for management accounts and for understanding the shape of the expense. Use the tax form for the deduction.

The walkthrough below uses the numbers already sitting in Depreciation Calculator. Press Calculate and the headline should match this page. Then put your own figures in. The math does not run until you press the button, and Clear hides the result.

What each field is doing

The “Cost” line on Depreciation Calculator starts at $18,000.00. A round example is useful for learning the page. It is a poor substitute for the number on your own paperwork, so replace it and run the form again.

Depreciation Calculator treats “Salvage value” as its own entry, and the form opens with $2,000.00. The other fields stay put while you change this one. That is the clean way to see what this line is doing inside the result.

Before you replace it, “Useful life” reads 5 on Depreciation Calculator. If the label is a rate, type the annual figure the contract uses. If it is money, type the amount that will actually move, not a rounded hope.

The remaining fields

Look at “Method” first if you are checking Depreciation Calculator: the filled value is Straight line. Leave that figure only when it matches the statement, the quote, or the plan you are testing. Press Calculate after the edit so the chart and the schedule move with it.

The “Declining-balance percent” line on Depreciation Calculator starts at 200%. 200 is double declining. Used only for that method. A round example is useful for learning the page. It is a poor substitute for the number on your own paperwork, so replace it and run the form again.

The opening result, line by line

Press Calculate on the opening form and First-year depreciation is $3,200.00. That is the number the rest of this section is talking about.

Depreciable base is $16,000.00 when you run the opening figures on Depreciation Calculator. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

On this opening pass, book value at the end is $2,000.00. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

How those lines were produced

Straight line spreads cost evenly. Declining balance uses the percent you enter, often 200% of straight line, and it does not drop below salvage.

A second pass changes only “Cost”, from $18,000.00 to $19,800.00. First-year depreciation moves from $3,200.00 to $3,560.00. Nothing else on the form was edited, so the gap between those two results is the effect of that one field on Depreciation Calculator. If the gap is tiny, this page is not very sensitive to that entry. If the gap is large, get that entry from a document before you plan around the result.

What this page will not claim

Depreciation Calculator uses the operating numbers on the form. It does not file a return, set a price for you, or know which costs your accountant would call fixed. Read the result next to the books, not instead of them.

Depreciation Calculator stops at its own formula. When the next question is different, open Business Loan Calculator (Note rate and fees, stated as APR.); Break-Even Calculator (Fixed costs divided by contribution per unit.); Margin Calculator (Profit as a share of the selling price.). Do not add those results to this one as if they were the same kind of dollar.

Check the result before you use it

Start on Depreciation Calculator by reading the labels, not the headline. The opening labels are Cost ($18,000.00), Salvage value ($2,000.00), Useful life (5), Method (Straight line), Declining-balance percent (200%). If a label is not the fact you have, the result cannot turn into that fact later. The illustration on the form lands on $3,200.00. When you press Calculate and see that same figure, the button and this explanation are using one formula.

Change one field at a time. Write down the headline, edit a single line, and press Calculate again. A large jump means that line carries the result. A line that does not move is a line the formula ignores, which is a reason to confirm you opened the right page. Depreciation Calculator is built for one job: Straight line or declining balance, year by year. The description on the page says the same thing in a sentence: Schedule straight-line or declining-balance depreciation down to a salvage value.

When the paperwork disagrees

Then hold the headline next to a source outside the site. That source might be a loan estimate, an account statement, a pay stub, or the public limit named in the methodology. A few cents of difference on a long schedule is ordinary rounding. A different rate, a fee you never typed, or a tax the form does not ask for is not rounding. Correct the input. Do not average the page with the paperwork.

When the outside source still disagrees, Depreciation Calculator has reached the edge of what it will claim. It will not phone a lender, pull a county record, or apply a credit you left blank. Send the calculator name, every input, and the result you expected through the contact page if you think the formula itself is wrong. Until that is settled, read $3,200.00 as the output of the fields above and nothing else.

FAQs