Depreciation Calculator
Enter an asset's cost, salvage value and useful life, choose a method, and get the full depreciation schedule: expense, accumulated depreciation and book value for every period, with the working for period 1. The time-based methods are charted and tabulated side by side, and the results match Excel's SLN, DB, DDB and SYD functions. Free, no sign-up.
The asset
Each period is a full year, except year 1 under the fixed-rate declining-balance method. Book value never falls below salvage under straight-line, double-declining and units-of-production.
Results
$1,800.00
Period 1 expense
$9,000.00
Depreciable amount (cost − salvage)
$9,000.00
Total depreciation
$1,000.00
Ending book value
20%
Annual rate (1 ÷ life)
The working for period 1
Expense = (cost − salvage) ÷ life = ($10,000.00 − $1,000.00) ÷ 5 = $1,800.00
Depreciation schedule
| Period | Depreciation expense | Accumulated depreciation | Book value at period end |
|---|---|---|---|
| 1 | $1,800.00 | $1,800.00 | $8,200.00 |
| 2 | $1,800.00 | $3,600.00 | $6,400.00 |
| 3 | $1,800.00 | $5,400.00 | $4,600.00 |
| 4 | $1,800.00 | $7,200.00 | $2,800.00 |
| 5 | $1,800.00 | $9,000.00 | $1,000.00 |
The four time-based methods side by side
| Period | Straight-line | Declining balance (DB) | Declining (DDB) | Sum-of-years'-digits |
|---|---|---|---|---|
| 1 | $1,800.00 | $3,690.00 | $4,000.00 | $3,000.00 |
| 2 | $1,800.00 | $2,328.39 | $2,400.00 | $2,400.00 |
| 3 | $1,800.00 | $1,469.21 | $1,440.00 | $1,800.00 |
| 4 | $1,800.00 | $927.07 | $864.00 | $1,200.00 |
| 5 | $1,800.00 | $584.98 | $296.00 | $600.00 |
How to Use the Depreciation Calculator
- 1. Choose a method. Straight-line, fixed-rate declining balance (Excel's DB), double-declining balance (DDB), sum-of-the-years'-digits (SYD) or units of production.
- 2. Enter the asset. The cost, the salvage (residual) value you expect at the end of its life, and the useful life in whole years. For units of production, enter the total units the asset will produce and the units used in each period instead.
- 3. Adjust the method's option. DB takes the number of months of depreciation in year 1; DDB takes a factor (2 for double) and an option to switch to straight-line when that gives a larger charge.
- 4. Read the schedule. Each row shows the period's expense, the accumulated depreciation and the book value at the end of the period. For the time-based methods, a chart and a table compare all four methods side by side.
The Methods and Their Formulas
Depreciation spreads the cost of an asset, less what you expect to recover at the end, over the periods that use it. The depreciable amount is cost − salvage; straight-line, sum-of-the-years'-digits and units of production charge exactly that amount over the asset's life. The two declining-balance methods charge it faster at first but may leave book value above salvage at the end (DB usually does, DDB does unless its cap or a switch to straight-line closes the gap). The methods differ in when the charge falls.
- Straight-line (SLN) charges the same amount every period: (cost − salvage) ÷ life.
- Declining balance (DB) applies a fixed rate to the opening book value. Excel computes the rate as 1 − (salvage ÷ cost)^(1 ÷ life) and rounds it to three decimals. Year 1 is prorated by months ÷ 12, and if year 1 has fewer than 12 months a final partial period (life + 1) takes the remainder of the year.
- Double-declining balance (DDB) applies factor ÷ life to the opening book value (2 ÷ life for double-declining) and never takes book value below salvage. Excel's DDB does not switch to straight-line; its VDB function can. Tick the switch option here to see the VDB behaviour.
- Sum-of-the-years'-digits (SYD) multiplies the depreciable amount by the remaining life ÷ the sum of the years' digits, life × (life + 1) ÷ 2. A five-year asset uses 5/15, 4/15, 3/15, 2/15, 1/15.
- Units of production charges (cost − salvage) ÷ total units for each unit used, so the expense follows usage, not time.
Worked Example
A machine costs 10,000, is expected to be worth 1,000 after five years, and has a depreciable amount of 9,000. Straight-line charges 1,800 a year. Double-declining uses a rate of 2 ÷ 5 = 40%, so year 1 is 4,000, year 2 is 2,400, year 3 is 1,440 and year 4 is 864; in year 5 the 40% charge of 518.40 would take book value below salvage, so it is capped at 296 and book value ends at exactly 1,000. Sum-of-the-years'-digits charges 3,000, 2,400, 1,800, 1,200 and 600.
| Year | Straight-line | DB (rate 0.369) | Double-declining | Sum-of-years'-digits |
|---|---|---|---|---|
| 1 | 1,800.00 | 3,690.00 | 4,000.00 | 3,000.00 |
| 2 | 1,800.00 | 2,328.39 | 2,400.00 | 2,400.00 |
| 3 | 1,800.00 | 1,469.21 | 1,440.00 | 1,800.00 |
| 4 | 1,800.00 | 927.07 | 864.00 | 1,200.00 |
| 5 | 1,800.00 | 584.98 | 296.00 | 600.00 |
| Total | 9,000.00 | 8,999.66 | 9,000.00 | 9,000.00 |
Note that DB leaves a book value of 1,000.34, not 1,000: rounding the rate to three decimals means fixed-rate DB only approximates salvage. For a units-of-production example, take 100,000 total units and 20,000, 30,000, 25,000, 15,000 and 10,000 units used in five periods; at 0.09 per unit the expenses are 1,800, 2,700, 2,250, 1,350 and 900.
Matching Excel's DB with a partial first year
For a cost of 1,000,000, salvage of 100,000, a life of 6 and 7 months in year 1, the calculator gives the seven periods Microsoft documents for DB: 186,083.33, 259,639.42, 176,814.44, 120,410.64, 81,999.64, 55,841.76 and 15,845.10.
Choosing a Method and Its Limits
Accelerated methods (DB, DDB, SYD) charge more in early years and suit assets that lose value or usefulness fast, such as vehicles and technology; straight-line suits assets that give even service; units of production suits machines whose wear depends on output. Accounting standards such as IAS 16 require a method that reflects how the asset's benefits are used up, and consistent use from period to period. This calculator uses whole periods; it does not do mid-month conventions for the other methods, impairment, revaluation, or tax depreciation systems such as MACRS, which use statutory tables. It is a learning aid, not accounting or tax advice.
Frequently Asked Questions
- What is the straight-line depreciation formula?
- Annual depreciation = (cost − salvage value) ÷ useful life. An asset costing 10,000 with 1,000 salvage and a five-year life is depreciated by 9,000 ÷ 5 = 1,800 each year. Excel's function is SLN(cost, salvage, life).
- What is the double-declining balance method?
- It charges a fixed percentage — twice the straight-line rate — on the opening book value each year, so the charge falls over time. With a five-year life the rate is 40%. Depreciation stops when book value reaches salvage, which is why the last year's charge is often smaller than 40%. Excel's function is DDB(cost, salvage, life, period, factor).
- Why does Excel's DB function round the rate?
- Excel computes the rate as 1 − (salvage ÷ cost)^(1 ÷ life) and rounds it to three decimal places before using it. That is why DB totals can differ slightly from cost − salvage. This calculator copies that behaviour so results agree with a spreadsheet.
- What is the sum-of-the-years'-digits method?
- An accelerated method that multiplies the depreciable amount by a falling fraction. The denominator is the sum of the years' digits (15 for a five-year life) and the numerator is the years remaining: 5/15 in year 1, then 4/15, and so on down to 1/15.
- What is book value?
- Cost minus accumulated depreciation: the amount at which the asset is carried on the balance sheet. It is an accounting figure, not necessarily the asset's market value, and it should not fall below salvage.
- Can salvage value be zero?
- Yes for straight-line, double-declining, sum-of-years'-digits and units of production. Excel's DB breaks down, though: with zero salvage the rate is 100% and the whole cost is charged in year 1, so use a small positive salvage or another method.