Depreciation calculator — straight-line and reducing-balance schedules

How to use the depreciation calculator

1. Enter the Asset cost: the price paid, plus any cost of getting it ready to use.
2. Enter the Salvage value: what you expect to sell or scrap it for at the end. Use 0 if nothing.
3. Enter the Useful life in whole years (at least 1).
4. Choose a Method: Straight-line or Reducing balance.
5. For reducing balance, enter a Reducing-balance rate, or leave it at 0 to let the calculator pick the rate that ends at salvage.
6. Read the first-year or yearly charge, the rate, the end book value and the total, then check the chart and the downloadable Depreciation schedule.

What it does and when to use it

A machine, a laptop or a delivery van loses value as it is used. Depreciation spreads the cost of that asset over the years it earns money for you, instead of counting it all in the year you bought it. Small business owners use a schedule like this to plan profits, price their services or decide when to replace equipment. Students use it to check accounting homework.

The two methods suit different assets. Straight-line fits things that wear out evenly, such as furniture. Reducing balance fits things that lose most of their value early, such as vehicles and electronics. Running both side by side shows how much the choice moves profit between years. To see what the same money would be worth in future at an interest rate, try the future value calculator; to judge whether buying the asset pays off, the payback period calculator and the NPV calculator look at the cash it brings in.

How it works

Straight-line. The IRS describes this method as deducting the same amount each year over the useful life, after subtracting any salvage value:

Yearly depreciation = (cost − salvage) ÷ useful life

The calculator also shows that charge as a rate on the original cost.

Reducing balance (written-down value). Each year:

Depreciation = book value at start of year × rate

The book value then falls by that amount. If you enter 0 as the rate, the calculator solves for it:

Rate = 1 − (salvage ÷ cost)^(1 ÷ life)

With a salvage value of 0 and no rate entered, that formula gives 100%, so the whole cost is written off in year 1. Enter a rate if you want a gradual schedule down to zero.

Worked examples

These figures come from the calculator’s own function.

Straight-line. Cost ₹5,00,000, salvage ₹50,000, life 5 years. Yearly depreciation ₹90,000.00, a rate of 18% on cost. Book value falls ₹4,10,000 → ₹3,20,000 → ₹2,30,000 → ₹1,40,000 → ₹50,000.

Reducing balance at 40%. Cost ₹1,00,000, salvage 0, life 3 years, rate 40%. The charges are ₹40,000.00, then ₹24,000.00, then ₹14,400.00. Book value at end of life is ₹21,600.00, because a fixed percentage never reaches zero on its own.

Reducing balance, rate found for you. Cost ₹5,00,000, salvage ₹50,000, life 5 years, rate 0. The calculator uses 36.9% on book value. Year 1 depreciation is ₹1,84,521.33 and the schedule ends exactly at ₹50,000.00, with total depreciation of ₹4,50,000.00, the same total as straight-line but front-loaded.

Limits and tips

• Whole years only. There is no part-year or mid-month convention for assets bought partway through a year.
• Not a tax schedule. Tax law sets its own rates and lives, which may differ from what you enter. Use this for planning and learning.
• Salvage cannot exceed cost, and cost must be above zero.
• The calculation is done in your browser.