THE NUMORIX GUIDE
How to use the Depreciation Calculator
Last reviewed September 14, 2026
What this calculator does
Straight-line depreciation is (cost - salvage) / useful life and produces the same annual expense each year.
Formula and method
Straight-line depreciation is (cost - salvage) / useful life and produces the same annual expense each year. Double-declining balance uses rate = 2 / useful life and applies that rate to the opening book value, limiting the final expense so book value does not fall below salvage. The schedule reports annual expense, accumulated depreciation, and book value.
Variables and inputs
Enter asset cost, salvage value, useful life in years, and choose Straight-Line or Double Declining Balance. Values are dollars except useful life in years. The route calculates accounting-style depreciation; it does not select a tax convention automatically.
Worked example
For a $50,000 asset with $5,000 salvage value and 10-year life, straight-line annual depreciation is (50,000 - 5,000) / 10 = $4,500; after year 1 book value is $45,500. Double-declining rate is 2 / 10 = 20%, so year-one expense is 50,000 x 0.20 = $10,000 and book value is $40,000; year-two expense is 40,000 x 0.20 = $8,000.
How to interpret the result
Straight line spreads depreciable cost evenly. Double declining recognizes more expense earlier and less later, subject to the salvage floor. Depreciation is a noncash accounting allocation and is not the same as current market value or cash paid for an asset.
Common mistakes to avoid
Do not depreciate salvage value. Keep useful life in years, not months. Do not use a book-depreciation schedule as a tax deduction without checking the asset class, placed-in-service date, conventions, and applicable law.
Assumptions and limitations
The route supports only two simplified methods and full-year periods. It excludes partial-year conventions, Section 179, bonus depreciation, tax basis adjustments, impairment, disposals, and changes in estimates. It does not validate that salvage is below cost.