Asset depreciation calculator
Depreciation by three methods with salvage value and a year-by-year table.
Fill in the fields and the result will appear here automatically.
Calculates depreciation by straight line, double declining balance and sum of years digits. Straight line splits the depreciable base evenly. Double declining takes twice the straight-line rate off the remaining book value and writes off more in the early years, yet never drops the book below the salvage value — that floor is what separates the method from a plain geometric series. Sum of years digits spreads the base in proportion to the life left: out of five years the first takes 5/15 and the last 1/15. The table shows every year at once. Pure declining balance can leave book value above salvage at the end of the chosen life: there is no automatic switch or final adjustment.
How it works
Formula and logic
Straight line charges (cost − salvage) / life. Pure double declining balance charges the lesser of book value × (2 / life) and book value minus salvage. There is no switch to straight line or forced last-year adjustment, so final book value may exceed salvage. Sum of years digits charges base × remaining years / [life × (life+1) / 2]. Life and selected year are whole numbers, life is 1–50 years, and internal table amounts are not rounded.
Example
An asset of 1,200,000 with a 200,000 salvage over five years writes off 200,000 a year on a straight line.
Fields and units
- Initial cost — $
- Salvage value — $
- Useful life, years — years
- Method — list option
- Year to show — unitless
How to use
- — Enter the initial cost and what the asset can be sold for at the end of its life.
- — Useful life is given in years and sets the write-off rate.
- — Pick a method: straight line is even, declining balance is faster early, sum of years sits between them.
- — The year to show pulls one row of the table out on its own.
Method and limitations
- Calculation method
- Formula and logic
- Data or methodology source
- Microsoft DDB: pure declining balance; switching to straight line belongs to VDB
- Limitation
- Educational formulas for whole yearly periods; neither a market-price appraisal nor a choice of legally permitted tax method. Salvage is a user estimate. No switch to straight line, partial years or country rules are applied.
FAQ
How does double declining differ from a plain geometric series?
The double rate applies to current book value, capped at book value minus salvage. With a two-year life the rate is 100%, so the first write-off can already reach that floor; the cap also matters for a one-year life. A longer declining schedule can end above salvage.
What is the salvage value for?
It is what the asset can be sold for at the end of its life. Only the difference between purchase and salvage is depreciated — writing an asset that holds value down to zero would be wrong.
Which method should I use?
The choice depends on accounting policy and applicable rules. These formulas illustrate depreciation schedules rather than choosing a permitted tax method or guaranteeing tax savings. The declining method here does not switch automatically to straight line.
Is this a tax calculation?
No. This is the arithmetic of three classical methods. Which of them your accounting permits, and over what life, is a question of policy and law, not of a calculator.