Depreciation Calculator

This calculator computes annual depreciation for a fixed asset under three standard accounting methods. Choose the method that matches your accounting standard or tax situation.

1. Enter the asset cost: the total purchase price including installation and shipping.
2. Enter salvage value: the estimated residual value at the end of the asset's useful life. Enter 0 if the asset has no salvage value.
3. Enter useful life in years: common values are 3 years (computers), 5 years (vehicles, equipment), 7 years (office furniture), and 27.5 years (residential rental property for tax purposes).
4. For declining balance, choose the multiplier. Double declining balance (2x) is most common for tax purposes. 1.5x (150% DB) is also used.

Straight-Line (SL): Equal depreciation each year.

Annual Depreciation = (Cost - Salvage) / Useful Life

Example: $50,000 asset, $5,000 salvage, 5 years. Annual = $9,000/year every year.

Double Declining Balance (DDB): Higher depreciation early, switches to straight-line when beneficial.

Rate = (2 / Useful Life) Annual Depreciation = Book Value × Rate

Example: Same asset. Year 1: $50,000 × 40% = $20,000. Year 2: $30,000 × 40% = $12,000. Year 3 switches to SL when SL exceeds DDB.

Sum of Years Digits (SYD): Accelerated, but less aggressive than DDB.

SYD = n × (n + 1) / 2 Year k Depreciation = (n - k + 1) / SYD × (Cost - Salvage)

For 5 years: SYD = 15. Year 1 uses 5/15, Year 2 uses 4/15, ... Year 5 uses 1/15.