Estimate asset value decline over time for accounting and budgeting.
Overview
Depreciation allocates the cost of a long-lived asset over its useful life rather than expensing everything at purchase. This helps align accounting expense with asset usage over time.
This calculator supports common methods like straight-line and declining balance so you can compare expense timing and remaining book value paths.
Accounting standards and tax rules differ by jurisdiction, so use this as a planning tool and confirm treatment with your accountant.
Steps
Use purchase price plus capitalizable setup costs.
Estimate residual value at end of useful life.
Input expected service duration in years.
Pick straight-line or accelerated method.
Review annual expense and remaining book value.
Evaluate timing impact on financial statements.
Math
Straight-line expense = (Cost - Salvage)/Useful life
Straight-line spreads depreciable basis evenly across periods, while accelerated methods apply higher early-period expense and lower later-period expense.
Worked cases
(12,000 - 2,000) / 5
$2,000 depreciation expense per year.
Apply accelerated percentage to opening book value each year
Higher depreciation early, lower expense in later years.
Asset cost minus accumulated depreciation to date
Shows remaining carrying value for planning and replacement timing.
Why use this
Questions