Depreciation Calculator
Spread an asset’s cost evenly across its useful life and see a full year-by-year book-value schedule.
Total depreciable amount: $18,000.00 written off evenly over 5 years.
Book value falls in equal steps each year, from the $20,000.00 cost down to the $2,000.00 salvage value.
| Year | Depreciation | Accumulated | Book value |
|---|---|---|---|
| 1 | $3,600.00 | $3,600.00 | $16,400.00 |
| 2 | $3,600.00 | $7,200.00 | $12,800.00 |
| 3 | $3,600.00 | $10,800.00 | $9,200.00 |
| 4 | $3,600.00 | $14,400.00 | $5,600.00 |
| 5 | $3,600.00 | $18,000.00 | $2,000.00 |
Straight-line depreciation spreads an asset’s cost evenly over its useful life: annual depreciation = (cost − salvage value) ÷ useful life. A $20,000 machine with a $2,000 salvage value and a 5-year life depreciates $3,600 each year — its $18,000 depreciable cost divided by 5 — until its book value reaches the $2,000 salvage.
What straight-line depreciation is
Depreciation spreads the cost of a long-lived asset — a vehicle, machine, or piece of equipment — across the years it’s actually used, instead of expensing it all at once. The straight-line method is the simplest: it writes off the same amount every year. You take what the asset cost, subtract what you expect it to be worth at the end (its salvage value), and divide that depreciable amount by the number of years you’ll use it. The result is a steady annual expense and a book value that falls in equal steps.
Cost is the purchase price, salvage the estimated end-of-life value, and useful life the number of years; book value after year t = cost − t × annual depreciation
Worked example
A machine costs $20,000, has an estimated $2,000 salvage value, and a 5-year useful life.
- 1 Find the depreciable amount. Subtract salvage from cost: $20,000 − $2,000 = $18,000.
- 2 Divide by the useful life. $18,000 ÷ 5 years = $3,600 of depreciation per year.
- 3 Record the same expense every year. Each of the 5 years shows a $3,600 depreciation expense — that’s what “straight-line” means.
- 4 Track accumulated depreciation. It builds up $3,600 at a time: $3,600, $7,200, $10,800, $14,400, then $18,000.
- 5 Subtract from cost to get book value. Book value falls $20,000 → $16,400 → $12,800 → $9,200 → $5,600 → $2,000, ending exactly at the salvage value.
Depreciation schedule — $20,000 asset, $2,000 salvage, 5-year life
Straight-line depreciation of $3,600 per year. Accumulated depreciation grows to $18,000 and book value lands on the $2,000 salvage value.
| Year | Depreciation | Accumulated | Book value |
|---|---|---|---|
| 1 | $3,600 | $3,600 | $16,400 |
| 2 | $3,600 | $7,200 | $12,800 |
| 3 | $3,600 | $10,800 | $9,200 |
| 4 | $3,600 | $14,400 | $5,600 |
| 5 | $3,600 | $18,000 | $2,000 |
Reading the results
Straight-line vs. declining-balance. Straight-line charges the same expense every year, which suits assets that wear out evenly. Accelerated methods like declining-balance front-load the expense — larger deductions early on, smaller ones later — to match assets that lose most of their value quickly, such as computers or vehicles. Both methods write off the same total depreciable amount; they only differ in timing.
Salvage value matters. The salvage (or residual) value is your estimate of what the asset will fetch at the end of its useful life. A higher salvage value means a smaller depreciable amount and therefore a lower annual expense. Setting salvage to $0 means the whole cost is depreciated down to nothing over the life of the asset.