Depreciation schedule
The formula
How it works
Depreciation spreads the cost of an asset over the years you use it. This calculator shows the yearly depreciation and the falling book value, using either the steady straight-line method or the faster declining-balance method.
FAQ
What is salvage value?
It is the amount you expect the asset to be worth at the end of its useful life — its scrap or resale value. Depreciation only ever writes the value down to the salvage figure, never below it.
Straight-line or declining balance?
Straight-line spreads the cost evenly and is simplest. Declining balance writes off more in the early years, which better matches assets like vehicles and computers that lose value fastest when new.
What is book value?
Book value is the cost of the asset minus the depreciation taken so far. It falls each year until it reaches the salvage value at the end of the asset’s useful life.
Does depreciation affect cash flow?
No — depreciation is a non-cash accounting entry. The cash was spent when the asset was purchased; depreciation just spreads that cost across the years for accounting and tax purposes.
How do I choose the useful life?
Useful life is usually based on how long the asset realistically stays productive, often guided by accounting standards or tax tables for that asset class. Shorter lives mean higher depreciation each year.
Can salvage value be zero?
Yes, many assets are depreciated down to zero if they are expected to have no resale or scrap value at the end of their useful life.
Why does declining balance never quite reach zero?
Because each year’s depreciation is a percentage of the remaining book value, the balance shrinks but never mathematically hits zero on its own — that’s why this calculator caps the write-off at the salvage value.
About the depreciation calculator
This calculator works out how an asset loses value over time through depreciation, and shows the book value falling year by year. Depreciation is an accounting method for spreading the cost of something you buy — a machine, vehicle or computer — across the years it earns its keep, rather than counting it all as an expense on day one. Both the total and the schedule matter for tax, accounts and planning replacements.
How to use it
Enter the purchase cost, the salvage value you expect at the end, the useful life in years, and the method. The calculator shows the depreciation for each year and the remaining book value. For example, a $10,000 asset with a $1,000 salvage over 5 years loses $1,800 a year under the straight-line method. Switch to declining balance to see larger write-offs early on, tapering off as the asset ages.
The formula
Straight-line depreciation is — the same amount every year until the book value reaches the salvage figure. Declining balance instead applies a fixed rate to the shrinking book value each year; this calculator uses double the straight-line rate, , and stops writing down once it reaches the salvage value. Both methods remove the same total value over the asset’s life.
Where it is used
Businesses use depreciation to spread the cost of equipment across the years it is used, which smooths their accounts and often reduces taxable profit. Accountants pick a method to match how quickly an asset really loses value, and tax authorities set rules for which schedules are allowed. Individuals meet it most often with cars, which depreciate sharply in their first years — useful to know when buying new versus used.