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How to use
This calculator estimates book depreciation by straight-line or double-declining balance, switching to straight-line when needed so the schedule reaches salvage value by the end of the selected life. Choose a year to inspect its opening, charge and closing book value. Double-declining balance starts with an annual rate of 2 ÷ useful life applied to opening book value. With cost 10,000, zero salvage and a five-year life, the rate is 40%: year-one depreciation is 4,000 and year two is 2,400. This version switches to straight-line when it gives a larger charge on the remaining depreciable balance; year four in this example uses 1,080 instead of 864.
- Choose a depreciation method.
- Enter cost, salvage value and useful life.
- Choose the year to inspect.
- Calculate to see opening value, depreciation, accumulated depreciation and closing value.
How it is calculated
Example
For cost 10,000, salvage 1,000 and 5-year life under straight-line: depreciable amount is 9,000, annual depreciation 1,800 and year-1 closing book value 8,200.
Important notes
This is a general book-depreciation model. It does not apply tax systems such as MACRS or country/asset-specific rules. Useful life, salvage value and accounting policy vary; this is not tax or financial advice.
Worked examples and interpreting results
An asset costing 10000, residual value 1000 and life 5 years has straight-line depreciation 1800 annually. Book value after two years is 6400.
| Case | Calculation | Result |
|---|---|---|
| Annual depreciation | (10000 − 1000) ÷ 5 | 1,800 |
| Book value after two years | 10000 − 2 × 1800 | 6,400 |
| Year 1: cost 10000, zero salvage, five-year life | 10000 × (2 ÷ 5) | 4,000 |
| Year 2: opening book value 6000, rate 40% | 6000 × 0.4 | 2,400 |
| Year 4: straight-line switch, zero salvage | max(2160 × 0.4, (2160 − 0) ÷ 2) | 1,080 |
How to check the result
Choose straight-line and year 2. Book value follows an accounting method, not a market-price estimate; tax depreciation may follow different assumptions.
Straight-line versus double-declining depreciation
Straight-line depreciation divides depreciable cost (purchase cost minus salvage value) over useful life. Double-declining balance starts at twice the straight-line rate applied to each year's opening book value.
- Straight line: 12000 cost, 2000 salvage, 5-year life: (12000 − 2000) ÷ 5 = 2000 per year
- Accumulated straight-line depreciation after 3 years: 2000 × 3 = 6000
- First-year double-declining: 10000 cost, five-year life: 10000 × (2 ÷ 5) = 4000
Important note
Accounting depreciation is not the asset's current market price and tax rules may use different schedules. Estimated book value should not fall below the chosen salvage value.
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Frequently asked questions
Straight-line vs declining balance?
Straight-line spreads depreciation evenly; declining balance front-loads more expense.
Can book value fall below salvage?
No. The model clamps depreciation at salvage value.
Can I use this for a tax return?
Not by itself; use the applicable tax rules or a qualified professional.
How do I calculate the double-declining balance rate?
Divide 2 by useful life in years. Five years gives 0.4, or 40%. Apply it to opening book value each year, rather than repeatedly applying it to original cost.
Does this match DDB without a straight-line switch?
Not always. This calculator includes the straight-line switch, so later-year results can differ from a no-switch DDB model. It is not a jurisdiction-specific tax depreciation schedule.