Using the Depreciation Calculator
Choose the asset cost, expected residual value and useful life for the accounting scenario you are examining. The annual expense stays constant in this model even if the asset loses resale value faster in its early years.
Worked example
Use the example inputs below to reproduce this result. These are the form's starting values, not recommended targets. Changing your inputs updates your result above; this worked example stays fixed for comparison. Results are rounded for display.
Example inputs
- Asset cost
- 20000
- Salvage value
- 2000
- Useful life (years)
- 5
- Elapsed years
- 2
Example result
- Annual depreciation
- 3,600
- Book value
- 12,800
Method and assumptions
Straight-line method: (cost − salvage) / useful life. Does not apply tax depreciation schedules.
Keep accounting and cash timing separate
Business calculations can describe profitability, asset values or the timing of cash flows. These are related but different questions. Check which one the tool answers before using the result in a decision. A cash payment, an accounting expense and an investment return may occur in different periods, even when they relate to the same transaction.
Common question
Can depreciation take book value below salvage value?
Not in this straight-line model. Once the depreciable amount has been allocated, the balance stays at the entered salvage value.
Guide updated .