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Depreciation Schedule Calculator

See exactly how an asset's book value declines year by year.

How it is calculated

This is straight-line depreciation read at one chosen year. depreciable_base = cost − salvage_value, annual = depreciable_base ÷ useful_life_years, accumulated = min(annual × year_number, depreciable_base), book_value = cost − accumulated and remaining_life = max(life − year, 0). Cost and salvage are money amounts, life and year are in years, and the year must be 1 or more. Past the end of the useful life the accumulated figure is capped, so book value never falls below salvage value. A salvage value above cost, or a life of zero or less, returns no result. Remaining life is shown as a rounded whole number of years. Every full year gets the same charge, with no partial-year or mid-year convention, and tax depreciation rules may differ from this book method.

Worked example

A machine costs $50,000, has a salvage value of $5,000 and a 5-year life. We look at year 3. Depreciable base: 50,000 − 5,000 = 45,000. Annual depreciation: 45,000 ÷ 5 = $9,000.00. Accumulated after 3 years: 9,000 × 3 = $27,000.00. Book value: 50,000 − 27,000 = $23,000.00. Remaining life: 5 − 3 = 2 years.

By year 5 the book value reaches the $5,000 salvage value and stays there.

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Common mistakes

  • Depreciating the full cost. Salvage value is subtracted first, so only $45,000 here, not $50,000, is spread over the life.
  • Treating the year number as the number of years remaining. It is the year you want to look at (year 3 means after three full years), counted from the start.
  • Expecting depreciation to continue below salvage value. When the year goes beyond the useful life, accumulated depreciation stops at the depreciable base.
  • Entering the life in months. The field is in years, so a 60-month life must be entered as 5.
  • Using the result as the tax deduction. Tax authorities often prescribe their own methods, lives and conventions, so this book schedule may differ from the allowed deduction.

Sources

About this calculator

A straight-line depreciation schedule spreads an asset's depreciable cost (purchase price minus salvage value) evenly across its useful life, using the formula annual depreciation = (cost − salvage value) ÷ useful life in years. Accumulated depreciation at any given year is simply that annual amount multiplied by the number of years elapsed, and book value is the original cost minus accumulated depreciation.

Accountants and business owners use straight-line depreciation — the simplest and most widely used of the standard depreciation methods (alongside declining-balance and units-of-production) — to expense the cost of equipment, vehicles, or buildings over time for both financial reporting (matching an asset's cost to the periods it generates revenue) and tax purposes, where many jurisdictions require a specific depreciation schedule to calculate deductible expense each year. It's also used when valuing used equipment or negotiating asset sales, since book value gives a standardized reference point distinct from market value.

With an asset's cost, salvage value and useful life it gives the yearly depreciation charge and, for any year you pick, the accumulated depreciation and the book value left, so you can follow the asset down the books year by year.

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