Build a full depreciation schedule in seconds. Enter the asset cost, salvage (residual) value and useful life, choose a method, and this free depreciation calculator shows yearly depreciation, accumulated depreciation and book value for straight-line, reducing balance (WDV), double declining balance, sum-of-the-years’-digits or units of production, with the journal entry.
Depreciation methods and formulas
Worked example (straight-line)
A machine costs Rs 500,000, has a salvage value of Rs 50,000 and a 5-year life. Depreciable amount = 450,000, so yearly depreciation = Rs 90,000 and the depreciation rate is 18% of cost. After 3 years accumulated depreciation is 270,000 and the book (carrying) value is 230,000.
Which method should you use?
- Straight-line: the default under IFRS (IAS 16) when an asset is used evenly; buildings, furniture.
- Reducing balance / WDV: higher charges early for assets that lose value fast, such as vehicles and computers. Tax rules (e.g. Pakistan’s Third Schedule, India’s Income Tax Act) often prescribe WDV rates.
- Sum-of-years’-digits and double declining: accelerated methods common in US textbooks and exams.
- Units of production: when wear depends on use, such as machine hours or vehicle kilometres.
Frequently asked questions
How do I calculate straight-line depreciation?
Subtract the salvage value from the cost and divide by the useful life in years. A Rs 500,000 asset with Rs 50,000 salvage over 5 years depreciates Rs 90,000 a year.
What is the reducing balance (WDV) method?
Depreciation each year is a fixed percentage of the asset’s opening book value, so charges are highest in year one and fall every year. Enter your rate, or leave it blank to use the rate that reduces the asset to its salvage value.
How does double declining balance work?
The rate is twice the straight-line rate (2 ÷ life), applied to the book value each year. The calculator stops depreciating once book value reaches salvage value.
What is the journal entry for depreciation?
Debit Depreciation Expense and credit Accumulated Depreciation (a contra-asset account). The asset’s carrying amount is cost minus accumulated depreciation.
Can I use it for tax depreciation?
It shows the maths for each method, but tax depreciation rules (allowances, half-year conventions, initial allowances) vary by country, so check the rules or a tax adviser for filing.
Related tools
Free educational tool by HawkInc. Results are calculated in your browser and rounded for display; check critical work by hand or with a second method.