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About Depreciation Calculator
Quickly calculate the depreciation of any asset using various methods like Straight-Line, Declining Balance, MACRS, and more.
What is Depreciation?
Depreciation is the process of allocating the cost of a tangible asset over its useful life. It represents how much of an asset's value has been used up over time and is crucial for accounting and tax purposes.
How to Use the Depreciation Calculator
- Enter the initial cost (purchase price) of the asset.
- Enter the asset’s salvage value (estimated residual value).
- Provide the useful life of the asset in years.
- Select the depreciation method: Straight-Line, Declining Balance, Double Declining Balance, or MACRS.
- Click "Calculate" to view annual depreciation and ending book value.
Depreciation Formulae
Straight-Line Method:
Annual Depreciation = (Cost - Salvage Value) / Useful Life
Declining Balance Method:
Depreciation = Book Value × Depreciation Rate
Double Declining Balance Method:
Depreciation = 2 × Straight-Line Rate × Book Value
MACRS Method:
This is an accelerated depreciation method used in the U.S. for tax purposes based on IRS-defined classes and tables.
Example Calculation
Asset Cost: $10,000
Salvage Value: $1,000
Useful Life: 5 years
Method: Straight-Line
Annual Depreciation = ($10,000 - $1,000) / 5 = $1,800 per year
Benefits of Using Our Depreciation Calculator
- Free and instant calculations
- Supports multiple depreciation methods
- Clear visual breakdown of yearly asset value
- Ideal for accountants, students, and small businesses
- No sign-up or downloads required
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FAQs about Depreciation Calculator
1. What is the most commonly used depreciation method?
Straight-Line depreciation is the most commonly used method due to its simplicity and ease of implementation.
2. Can I use this calculator for tax purposes?
Yes, the calculator supports MACRS, which is used in the U.S. for calculating tax depreciation.
3. Is salvage value necessary?
Yes, most methods require you to enter a salvage value to calculate accurate depreciation.
4. Can this calculator handle partial-year depreciation?
Currently, this version calculates full-year depreciation only.
5. Is this tool free to use?
Yes! It’s completely free and accessible from any device.