Depreciation calculator (straight-line method)

This calculator can be used to calculate the depreciation expense of an asset over its useful life using the straight-line method. The straight-line method evenly spreads the cost of an asset over its expected useful lifespan.

Page written by AI. Reviewed internally on June 25, 2024.

This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.

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How to calculate depreciation (straight-line method)

Here’s how you can calculate depreciation using the straight-line method:

Determine the cost of the asset.
Estimate the salvage value (the value of the asset at the end of its useful life).
Calculate the depreciable cost by subtracting the salvage value from the cost of the asset: Depreciable Cost = Cost of Asset – Salvage Value.
Determine the useful life of the asset in years.
Divide the depreciable cost by the useful life to calculate the annual depreciation expense: Annual Depreciation Expense = Depreciable Cost / Useful Life.

A depreciation calculator using the straight-line method typically requires you to input the cost of the asset, salvage value, and useful life. The calculator then provides you with the annual depreciation expense.

Using this method, the asset’s value is reduced by the same amount each year, providing a systematic way to account for the reduction in value over time. This is a common method used in accounting to allocate the cost of assets and determine their book value.