Numarly

Depreciation Calculator

Calculate asset depreciation using the Straight-Line or Written Down Value method.

What is it?

This calculator computes asset depreciation using two standard accounting methods: Straight-Line (equal depreciation every year) and Written Down Value / declining balance (a fixed percentage of the remaining book value each year).

Formula

Straight-Line: Annual Depreciation = (Cost − Salvage Value) ÷ Useful Life
WDV: Annual Depreciation = Book Value × Depreciation Rate

Formula Explanation

Straight-line depreciation spreads the cost evenly across the asset's useful life, giving the same depreciation expense every year. WDV instead applies a fixed percentage to the asset's remaining book value each year, so depreciation is highest in early years and gradually shrinks — often used because it better matches how assets like vehicles and machinery actually lose value.

Example Calculation

A $500,000 machine with no salvage value depreciated straight-line over 5 years loses $100,000 every year. The same machine under WDV at 15% loses $75,000 in year one but only about $53,000 in year two, as the rate applies to a shrinking base.

How to Use

  1. Choose the Straight-Line or Written Down Value tab.
  2. Enter the asset's original cost.
  3. For straight-line, enter salvage value and useful life; for WDV, enter the annual depreciation rate and number of years.
  4. Review the year-by-year depreciation and book value schedule.

Benefits

  • Covers both major depreciation methods used in accounting and tax filings.
  • Shows a full year-by-year schedule, not just a single annual figure.
  • Useful for comparing how differently the two methods spread an asset's cost over time.

Use Cases

  • Preparing depreciation schedules for business accounting or tax filing.
  • Estimating an asset's resale or book value at a future date.
  • Comparing straight-line vs. WDV depreciation impact on reported profit in early years.

What Your Result Means

The book value shown for each year is the asset's remaining value on the balance sheet after that year's depreciation. Under WDV, book value approaches but never quite reaches zero; under straight-line, it reaches the salvage value exactly at the end of the useful life.

Tips

  • Check applicable tax rules in your country — many specify which depreciation method and rates are allowed for different asset classes.
  • WDV front-loads depreciation, which can reduce taxable profit more in early years — useful for assets that lose value quickly.
  • Straight-line is simpler and more predictable for budgeting and financial reporting.

Common Mistakes

  • Using the wrong salvage value assumption — some methods and tax rules assume zero salvage value by default.
  • Mixing up which method your accounting software or tax authority requires for a specific asset class.
  • Forgetting that WDV book value never technically reaches zero — it approaches it asymptotically.

FAQs

Which depreciation method should I use?

It depends on your accounting policy and local tax rules — straight-line is simpler and more common for financial reporting, while WDV (declining balance) is often used or required for tax purposes on certain asset classes.

What is salvage value?

It's the estimated resale or scrap value of an asset at the end of its useful life — straight-line depreciation only depreciates the cost above this value.

Can I switch depreciation methods partway through an asset's life?

Generally not without specific accounting justification and disclosure — switching methods can distort financial comparisons and may not be allowed under some tax rules.

This tool provides standard depreciation calculations for general reference — always confirm the specific method and rates required by your accounting standards or tax jurisdiction.

Last updated: July 26, 2026