About the Depreciation Calculator
Our free Depreciation Calculator helps businesses, accountants, and asset managers compute asset wear and tear over time using standard accounting methods. Whether you are preparing financial statements or assessing fixed asset values, this tool generates a complete year-by-year schedule table.
Depreciation Methods Explained
Fixed asset depreciation can be calculated using two primary methods:
- Straight-Line Method (SLM): Allocates an equal amount of depreciation expense each year throughout the asset's useful life, based on original cost minus salvage value.
- Written-Down Value (WDV) / Declining Balance: Applies a constant percentage depreciation rate to the reducing book value of the asset each year, resulting in higher depreciation charges in earlier years.
How to Use the Calculator
Simply enter your asset parameters:
- Original Asset Cost: The initial purchase price or capital cost of the asset.
- Salvage / Scrap Value: The estimated residual value of the asset at the end of its useful life.
- Useful Life: The expected operational lifespan of the asset expressed in years.
- Depreciation Method: Choose between Straight-Line (SLM) and Written-Down Value (WDV).
Click the Calculate button to instantly view your depreciation summary and full year-by-year schedule table.
Frequently Asked Questions (FAQs)
What is salvage value in asset depreciation?
Salvage value (or scrap value) is the estimated book value of an asset after depreciation is complete, representing what the business expects to recover when disposing of it.
Which depreciation method is better for tax purposes?
Many accounting standards and tax laws permit WDV (written-down value) methods because they front-load depreciation expenses, reducing taxable income in the initial years of asset ownership.
Can accumulated depreciation exceed the depreciable amount?
No. Total accumulated depreciation across the asset's lifespan cannot exceed the total depreciable amount (Original Cost minus Salvage Value).
