Calculate yearly depreciation and book value for an asset using the straight-line or double-declining balance method, with a full schedule.
What is depreciation?
Depreciation spreads the cost of a long-lasting asset, such as a vehicle, machine or computer, over the years it is used, instead of counting the whole cost in the year of purchase. Book value is the cost minus depreciation taken so far.
Straight-line depreciation
Annual depreciation = (cost − salvage value) ÷ useful life
A $25,000 machine with a $5,000 salvage value and a 5-year life depreciates $4,000 a year.
Double-declining balance
Annual depreciation = book value at start of year × (2 ÷ useful life)
This accelerated method takes larger deductions early. For the same machine, year 1 is $25,000 × 40% = $10,000, year 2 is $15,000 × 40% = $6,000, and so on, never going below the salvage value. It suits assets that lose value quickly, like vehicles and technology.
Accounting versus tax depreciation
For U.S. taxes, businesses usually use the IRS's MACRS system with set recovery periods, and may be able to deduct more upfront with Section 179 or bonus depreciation. Those rules change, so ask a tax professional. This calculator is for book (accounting) depreciation and planning.
Frequently asked questions
Which method should I use?
Straight-line is simplest and most common for financial statements. Accelerated methods better match assets that lose value fast.
Can land be depreciated?
No. Land is not considered to wear out, although buildings on it can be depreciated.
Related tools
Results are estimates for planning and education. They are not accounting, tax or legal advice. Check important figures with a qualified accountant.