Depreciation CalculatorThe following calculator is for depreciation calculation in accounting. It takes straight line, declining balance, or sum of the year' digits method. If you are using double declining balance method, just select declining balance and set the depreciation factor to be 2. It can also calculate partial-year depreciation with any accounting year date setting.
In accounting, depreciation is a method of allocating the cost of assets over a period of time, usually its useful life. There are many methods of distribution depreciation amount over its useful life. The following are some of the widely used methods:
Straight-line depreciation is the most widely used and simplest method. It is a method of distributing the cost evenly across the useful life of the asset. The following is the formula:
- Depreciation per Year = (Asset Cost – Salvage Value) / Useful life
Declining Balance Method
Often, the value of asset decrease faster when it is new and the decrease rate declines with time. The declining balance method is one way to address this issue.
- Depreciation per Year = Book value × Depreciation rate
Double declining-balance is the most widely used in the declining balance method, which has a depreciation rate that is twice the value of straight line method for the first year. With the double declining balance method, the salvage value is not included in the annual depreciation. The depreciation will stop once the book value reached the salvage value.
Sum of the Year's Digits Method
Same as the declining balance method, the sum of the year's digits method also fact in the faster depreciation when the asset is new.
n is the asset's useful life in years.
Units of Production Depreciation Method
With this method, the depreciation is expressed by the total number of units produced v.s. the total number of units that asset can produce.
- Depreciation for the Year = (Asset Cost – Salvage Value) × Actual Production / Estimated Total Production in Life Time