๐ญ Depreciation Calculator
Calculate annual depreciation and book value for assets like cars and machinery.
What is Depreciation?
Depreciation is the allocation of an asset's cost over its useful life as an expense. It applies to assets that lose value over time, such as vehicles, machinery, and equipment.
Calculation Methods
Straight-Line
Deducts the same amount each period. Simple to calculate and easy to predict.
Annual Depreciation = (Initial Cost โ Salvage Value) รท Useful Life
Declining Balance
Deducts more in early years and less later. Suitable for assets that lose value quickly, such as cars and IT equipment.
Rate = 1 โ (Salvage Value รท Initial Cost)^(1 รท Useful Life) Annual Depreciation = Opening Book Value ร Rate
Typical Useful Lives
Vehicles are typically depreciated over 5 years, machinery over 5โ10 years, and buildings over 20โ40 years. Salvage value is often set at 5โ10% of the initial cost.