What this calculator does
See how much of an asset's cost to count as an expense each year, with a full year-by-year schedule. That yearly charge is called depreciation. It spreads the cost of something that lasts, such as a machine, a vehicle or office equipment, over the years you use it. That's instead of counting it all as an expense in the year you bought it. The asset's book value (its value on your books) starts at its cost and falls each year. It stops at the salvage value, what you expect it to be worth at the end. How quickly it falls depends on the method.
This calculator builds the whole schedule with any of the four standard accounting methods. These are straight line, declining balance (including double declining), sum-of-years' digits and units of production. Pick a year to see that year's depreciation, the accumulated depreciation (running total) so far and the book value, with the working shown. The table lists every year.
Where it's used
Why this math matters outside the classroom:
- Small business bookkeeping. A bakery spreads a $12,000 oven with $2,000 salvage over 10 years at $1,000 a year by straight line.
- Accounting classes. Students compare a 5-year, $45,000 base: straight line takes $9,000 a year while sum-of-years' digits starts at $15,000.
- Fleet vehicles. A delivery company charges $0.45 per mile when a van's $45,000 base is spread over 100,000 expected miles.
- Selling used equipment. An owner compares a sale price with book value to see whether the sale produces an accounting gain or loss.
- Budget planning. A school district projects the falling book value of new laptops to plan when to replace them.
Grade level and standards: Grades 9–10; Common Core State Standards for Mathematics HSF.BF.A.2. © Copyright 2010. National Governors Association Center for Best Practices and Council of Chief State School Officers. All rights reserved.
How to use it
- Choose a method.
- Enter the asset's cost and its expected salvage value at the end of its useful life.
- Enter the useful life in years. For units of production, enter the total units expected over the asset's life and the units used each year instead. For declining balance, set the rate (200% for double declining) and whether to switch to straight line.
- Enter the year you want to see. Then read that year's figures, and the full schedule in the table.
What the inputs mean
- Method
- Straight line charges the same each year. Declining balance and sum-of-years' digits charge more in the early years. Units of production follows how much the asset is actually used.
- Salvage value
- The expected resale or scrap value at the end of the asset's life. Depreciation stops when book value reaches it. Enter 0 if you expect it to be worth nothing.
- Declining-balance rate
- The declining-balance rate is this percentage divided by the life. 200% over 5 years charges 40% of the remaining book value each year.
- Switch to straight line when it gives a larger charge
- Pure declining balance never quite reaches salvage. With this on, the calculator switches to straight line in the year that gives a bigger charge. It then spreads what's left evenly over the remaining years, so the asset ends exactly at salvage.
- Total units over the asset's life
- Miles, machine hours or items produced over the whole useful life.
- Units used each year
- Miles driven, hours run or items produced in each year. The number of entries sets the number of years.
- Show results for year
- The year whose depreciation, accumulated depreciation and book value appear at the top. Year 1 is the first full year of use.
Formula and method
depreciable base = cost − salvage straight line: D = (cost − salvage) ÷ life declining balance: D = opening book value × (rate ÷ life), never below salvage sum-of-years' digits: D = (cost − salvage) × remaining life ÷ (n(n + 1) ÷ 2) units of production: D = (cost − salvage) ÷ total units × units used this year book value = cost − accumulated depreciation
D is the depreciation for one year, and life (or n) is the useful life in years. The depreciable base is the part of the cost you spread out: cost minus salvage. Opening book value is the book value at the start of the year.
Straight line divides the depreciable base evenly, so book value falls in a straight line. Declining balance takes a fixed percentage of the remaining book value. So the charge shrinks each year, and book value falls along a curve. Salvage isn't subtracted first. Instead the charge is capped, so book value never drops below it.
Sum-of-years' digits weights each year by how much life is left. For a 5-year asset the digits add to 15 (5 + 4 + 3 + 2 + 1). So year 1 takes 5/15 of the base, year 2 takes 4/15, and so on down to 1/15. Units of production sets a cost per unit of use, then multiplies it by each year's usage.
With the switch to straight line on, each declining-balance year is compared with spreading what's left evenly over the remaining years. The larger charge is used. This is the usual textbook approach, and it matches the variable declining balance functions in spreadsheets.
Worked example
A business buys equipment for $50,000. It expects to sell it for $5,000 after 5 years, and wants the depreciation for year 3.
- Depreciable base: $50,000 − $5,000 = $45,000.
- Straight line: $45,000 ÷ 5 = $9,000 every year; book value after year 3 is $50,000 − $27,000 = $23,000.
- Double declining balance (40%): year 1 $20,000, year 2 $12,000, year 3 40% × $18,000 = $7,200; book value after year 3 is $10,800.
- Sum-of-years' digits: the digits add to 15, so year 3 takes 3/15 × $45,000 = $9,000, after $15,000 and $12,000 in years 1 and 2; book value is $14,000.
- Units of production, with 100,000 units expected and 20,000 used in year 3: $45,000 ÷ 100,000 = $0.45 per unit, × 20,000 = $9,000.
Result: Year 3 depreciation is $9,000 by straight line, $7,200 by double declining balance and $9,000 by sum-of-years' digits. Accumulated depreciation after year 3 is $27,000, $39,200 and $36,000.
Understanding the result
All four methods depreciate the same total, the cost minus salvage, over the asset's life. They only differ in timing. Faster (accelerated) methods, declining balance and sum-of-years' digits, put more of the cost in the early years. That suits assets that lose value or usefulness quickly, such as vehicles and computers.
Book value is an accounting figure, not a market price. It shows how much of the cost hasn't been expensed yet. That matters for financial statements, and for working out a gain or loss when you sell the asset. Accumulated depreciation is the running total of all charges so far.
Assumptions and limitations
- The asset is put into use at the start of year 1 and depreciated in full years.
- Cost, salvage value and useful life are your estimates, and they don't change over the schedule.
- Book value never falls below the salvage value.
- This is book (financial accounting) depreciation. US tax depreciation follows MACRS tables, recovery periods and placed-in-service conventions that this calculator doesn't model. See IRS Publication 946 or a tax professional.
- Partial first years, mid-year conventions and changes in estimates partway through aren't modeled.
- Results are for education and planning, not accounting or tax advice.
Frequently asked questions
Which depreciation method should I use?
Straight line is the simplest, and the most common for financial statements. Accelerated methods fit assets that lose value fastest when new. Units of production fits assets whose wear depends on use, such as delivery trucks or production machines. Businesses usually pick one method per type of asset and stick with it.
What is double declining balance?
It's declining balance at twice the straight-line rate. For a 5-year asset the straight-line rate is 20% a year, so double declining charges 40% of the remaining book value each year. The salvage value isn't subtracted first, but depreciation stops once book value reaches it.
Why does declining balance not reach salvage on its own?
Taking a percentage of what's left never gets all the way to a target. So a pure declining-balance schedule can end above salvage. Switching to straight line, once that gives a larger charge, spreads the rest evenly and finishes exactly at salvage. Untick the switch to see the pure schedule.
Is this the same as tax depreciation?
No. US tax returns generally use MACRS, the IRS's own depreciation system. It sets fixed recovery periods, ignores salvage value and applies conventions such as the half-year rule. The results here are textbook accounting figures. They can differ a lot from a tax deduction.
How this calculator is checked
Method: Standard financial-accounting definitions of straight-line, declining-balance (with optional switch to straight line, as in spreadsheet VDB), sum-of-years'-digits and units-of-production depreciation; tested against textbook schedules. The calculation is covered by automated tests with known reference values and edge cases. Last updated 2026-10-18. Found a problem? Tell us.
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