Depreciation Calculator (Straight-Line & Declining Balance)
Enter the acquisition cost and useful life to instantly calculate a year-by-year depreciation schedule using the straight-line or declining balance (200%) method, free.
What Is a Depreciation Calculator
A depreciation calculator estimates how the cost of a fixed asset — a computer, vehicle, or piece of equipment — is spread out as an expense over its useful life, a process known as depreciation. Enter the acquisition cost and useful life, and the tool instantly builds a year-by-year schedule for both the straight-line and declining balance (200%) methods, showing the depreciation expense and remaining book value for each year.
Rather than expensing the full purchase price in the year an asset is bought, depreciation spreads the cost across the years the asset is expected to be used. Because the useful life and method you choose directly affect taxable income, simulating the schedule in advance helps with both tax planning and cash-flow forecasting.
How to Use
- Enter the acquisition cost Enter the purchase price of the asset (before tax, if your accounting is tax-exclusive).
- Enter the useful life Enter the useful life for that asset category (2-60 years), based on official tax guidance.
- Choose a depreciation method Select straight-line or declining balance (200%) to view its yearly schedule.
- Review the results See the depreciation rate, years to fully depreciate, total depreciation, and the year-by-year table of beginning value, expense, and ending value.
Tips for getting more out of it
- Useful life is set by tax authorities based on the asset type — for example, computers are commonly assigned a 4-5 year life and vehicles a 5-6 year life. Check your local tax guidance before entering a value.
- Straight-line spreads the expense evenly, making it easier to forecast profit. Declining balance front-loads a larger expense in the early years, which can be useful when you want to reduce taxable income sooner.
- Buildings and building improvements are typically restricted to the straight-line method under many tax codes, so confirm which method is actually allowed for the specific asset class.
- This tool is a simplified simulation based on the useful life you enter. For an official tax filing, confirm the exact depreciation rate and any guarantee-rate rules with a tax professional.
Use Cases
Computer and office equipment depreciation
Small business owners and freelancers can preview the yearly expense for a computer or office equipment purchase based on its official useful life.
Company vehicle depreciation
Compare the annual expense under straight-line versus declining balance for a company car or delivery vehicle before committing to a purchase.
Capital investment planning
Before a large equipment purchase, estimate how the choice of depreciation method changes profit and tax liability in the early years.
Glossary
- Straight-Line Method
- A depreciation method that applies a fixed rate to the acquisition cost, resulting in roughly the same expense every year across the useful life.
- Declining Balance Method (200%)
- A depreciation method that applies a fixed rate — roughly double the straight-line rate — to the beginning book value each year, producing a larger expense early on that shrinks over time.
- Useful Life
- The number of years an asset is officially expected to remain in service, as defined by tax authorities for each asset category. It is the basis for calculating depreciation.
- Book Value
- The value of an asset on the books, equal to the acquisition cost minus the accumulated depreciation recognized so far.
- Memorandum Value
- The small nominal value left on the books once an asset is fully depreciated, kept so the asset still appears in the records while it remains in use.
Frequently Asked Questions
Side Note — Why Book Value Stops at a Nominal Amount Instead of Zero
When a depreciable asset is fully written off, its book value typically does not reach exactly zero — it is left at a small nominal amount (commonly one unit of currency in many accounting systems, including Japan's well-known "1 yen" convention). This is often called a memorandum value, and it exists so that the asset still appears on the books as long as it remains in use, rather than disappearing from the records entirely.
The nominal value is removed from the books only when the asset is actually scrapped or sold, at which point the remaining amount is recognized as a disposal loss. This is why office equipment or company vehicles that have been in service for many years are sometimes jokingly described as being "worth almost nothing on paper" while still being used every day.
The reason two depreciation methods coexist — straight-line and declining balance — is that different industries and asset types call for different expense timing. Declining balance lets a business recognize a larger share of the cost early, which can help offset the cash outflow of a large purchase, while straight-line makes year-to-year profit easier to forecast. Businesses typically choose (or are required to use) one method depending on the asset category, within the rules set by their tax authority.