Depreciation Calculator FAQ
What is depreciation?
Depreciation allocates the cost of a tangible asset over its useful life. It reflects that assets such as equipment, vehicles, and machinery usually lose value as they age or are used.
What is straight-line depreciation?
Straight-line depreciation spreads the depreciable amount evenly across the useful life. The formula is D = (C - SV) / n, where C is asset cost, SV is salvage value, and n is useful life.
What is declining balance depreciation?
Declining balance depreciation applies a fixed rate to the previous book value. Double declining balance is a common version that uses a factor of 2. Depreciation stops when book value reaches salvage value.
What is sum-of-years-digits depreciation?
Sum-of-years-digits depreciation is an accelerated method. It applies larger depreciation expense in earlier years and smaller expense in later years.
What is salvage value?
Salvage value, also called residual value, is the estimated value of the asset at the end of its useful life. It is subtracted from asset cost to find the depreciable base.
Can this calculator be used for taxes?
Use it as an estimate only. Tax depreciation rules can require specific methods, conventions, recovery periods, and local reporting treatment. Check the applicable rules or ask a qualified tax professional.
