What the Depreciation Calculator does
This calculator builds a year-by-year depreciation schedule for an asset - a machine, a car, a laptop, a building fit-out - by straight line (SLM), written-down value (WDV), double declining balance (DDB), sum of the years' digits (SYD) or units of production. Enter the cost, the salvage value and the useful life, and it shows the depreciation for each year, the accumulated total and the book value left.
It handles an asset bought part-way through the year, derives a WDV rate from the life and residual value or uses the rate you enter, and compares every method on one chart. Figures stay in your browser; the schedule downloads as CSV.
How to use it
- Enter the cost (price plus delivery, installation and other costs of getting it ready), the salvage or residual value and the useful life in years. Pick your currency; rupees use Indian digit grouping.
- Choose the method. Straight line spreads the cost evenly; WDV, DDB and SYD charge more in the early years; units of production follows how much the asset is used.
- Set the months in use in the first year: 12 if it was in use from the start of the year, 6 for the half-year convention, or the actual number of months. For WDV, type your rate or leave it empty to derive one.
- Read the first-year figure, then the schedule. The chart shows the book value under every method, with yours as a solid line, and the bars compare first-year charges. Download the CSV for your working papers.
Reading the results
Depreciation spreads an asset's cost over the years it earns its keep. It is an accounting allocation, not a valuation: the book value is not what the asset would sell for, and it never falls below the salvage value you set.
The methods move the same total depreciation - cost minus salvage - between years. Faster methods (WDV, DDB, SYD) give bigger charges early and smaller later; straight line keeps them level. Over the whole life they add up to the same amount, which the comparison chart makes plain.
A part first year pushes the schedule into one more financial year: a 10-year asset bought half-way through year 1 is depreciated over 11 financial years, with half a year's charge at each end.
Worked example: a machine by straight line and a car by WDV
A machine costs 5,00,000 rupees with a residual value of 25,000 (5%) and a 10-year life. Straight line: (5,00,000 - 25,000) / 10 = 47,500 a year. Bought half-way through the first year, year 1 gets 23,750, years 2-10 get 47,500 and year 11 the last 23,750.
A car costs 8,00,000 with a 40,000 residual over 8 years. The WDV rate that writes it down to the residual is 1 - (40,000 / 8,00,000)^(1/8) = 1 - 0.6877 = 31.23%. Year 1 is 8,00,000 x 31.23% = 2,49,875; year 2 is 31.23% of the remaining 5,50,125 = 1,71,828, and after 8 years the book value is exactly 40,000.
Formulas and scoring rules
- Straight line (SLM)
annual = (cost - salvage) / lifePart first year: year 1 = annual x months / 12, and the remainder falls in year life + 1.- Written-down value (WDV)
depreciation = opening book value x r; derived r = 1 - (salvage / cost)^(1 / life)The first year is multiplied by months / 12. A typed rate is applied as given and may leave the book value above the salvage value at the end of the life.- Declining balance (DDB, 150%)
depreciation = opening book value x factor / lifeWith the switch on, straight line over the remaining life is used from the first year it gives more. With salvage 0, factor 2 and 6 months, this reproduces the IRS MACRS half-year table (Publication 946, Table A-1).- Sum of the years' digits (SYD)
year k = (cost - salvage) x (life - k + 1) / (life x (life + 1) / 2)Part first year: each asset year is split across two financial years in the ratio months/12 : (1 - months/12).- Units of production
per unit = (cost - salvage) / total units; year = units used x per unit
India, the US and the UK in brief
In India, Schedule II of the Companies Act 2013 sets useful lives for company accounts and generally caps the residual value at 5% of cost; both SLM and WDV are allowed, and the WDV rate is commonly worked out with the formula above. Income-tax depreciation is different: it uses WDV on blocks of assets at prescribed rates, with half the rate for assets used for less than 180 days in the year - enter that rate yourself.
In the US, tax depreciation follows MACRS (IRS Publication 946) with set recovery periods and conventions, while company accounts may use any systematic method. In the UK, accounts depreciate under FRS 102 or IFRS, but tax relief comes through capital allowances instead of depreciation.
Limitations: what the result does not prove
- It is not tax or accounting advice and holds no rate tables. Which method, life, residual value and rate you may use is set by your tax authority and accounting standard.
- It does not model MACRS mid-quarter or mid-month conventions, Section 179 or bonus depreciation, impairments, revaluations, additions to a block or the sale of an asset part-way through its life.
- Figures are calculated unrounded and displayed to two decimal places, so rows rounded by hand can differ by a paisa or a cent from the totals.
Privacy: where your data goes
Everything you paste, type or drop is processed in this browser tab. It is not uploaded, logged, stored or sent to analytics. Session recording and tag-manager scripts are switched off on this page.
Standards and sources
- IRS Publication 946 - How to Depreciate Property - checked 19 Sep 2026
- India Code - The Companies Act, 2013 (Schedule II, useful lives)
- IFRS Foundation - IAS 16 Property, Plant and Equipment
Frequently asked questions
How do you calculate straight-line depreciation?
Subtract the salvage value from the cost and divide by the useful life. A 1,00,000 asset with a 5,000 residual over 5 years depreciates (1,00,000 - 5,000) / 5 = 19,000 a year.
How is the WDV rate calculated as per the Companies Act?
The rate that brings the cost down to the residual value over the useful life is 1 - (residual / cost)^(1 / life). With a 5% residual over 5 years that is 45.07%; over 10 years, 25.89%. Leave the rate empty and the calculator derives it for you.
What is the difference between SLM and WDV depreciation?
SLM charges the same amount every year; WDV charges a fixed percentage of the remaining book value, so the charge is large at first and shrinks each year. Both reach the same total over the life when the WDV rate is derived from it.
How does double declining balance depreciation work?
Each year's charge is twice the straight-line rate applied to the opening book value - 40% a year for a 5-year asset. Because that alone never reaches the salvage value, the usual practice is to switch to straight line once it gives a larger charge, which the calculator does when the box is ticked.
How do I calculate depreciation for less than a full year?
Multiply the first year's charge by the months the asset was in use divided by 12. Set the months field and the rest of the schedule follows, including the extra part-year at the end for straight line and SYD.
How much does a car or bike depreciate each year?
That depends on the rules you are applying rather than on the vehicle. Enter its cost, an expected residual value and life, and choose WDV for a reducing charge or SLM for an even one. For tax, use the rate your tax law gives for vehicles.
Can the book value go below the salvage value?
No. Every method stops at the salvage value: the final year's charge is cut to whatever is left above it, and units of production stops once the depreciable amount is used up, even if more units are entered.
Last reviewed by the A2Z.Tools team against the sources listed above.
