Does this calculator handle MACRS or accelerated depreciation methods?

No. It is designed for straight-line depreciation only. Tax depreciation systems like MACRS, bonus depreciation, or Section 179 expensing have their own schedules and conventions that must be modeled separately.

Do I have to include a salvage value?

Not necessarily. If you expect no meaningful residual value, you can set salvage to zero. If you expect to sell or scrap the asset for a non-trivial amount, including a salvage estimate helps avoid over-depreciating.

How do I handle assets placed in service mid-year?

This calculator uses full-year straight-line. For mid-year placements, many organizations apply a half-year rule or prorate the first and last year manually. You can still use the annual depreciation figure from this tool and apply your convention separately.

Can I use this for intangible assets like software or patents?

Conceptually yes, but intangibles are usually amortized rather than depreciated and may follow different rules. Check your accounting policy to confirm appropriate lives and methods for intangible assets.

Will book and tax depreciation always match?

Often they do not. Companies frequently use straight-line for financial reporting and more accelerated methods for tax purposes. This calculator focuses on straight-line and is best used for book or planning purposes unless your tax method matches.

finance calculator

Straight-Line Depreciation Calculator

Compute annual depreciation from asset cost, salvage value, and useful life using the straight-line method.

Results

Depreciable base: $45,000
Annual depreciation: $9,000

Overview

Straight-line depreciation is the simplest way to spread the cost of an asset across its useful life. It assumes the asset loses the same amount of value each year, which makes it easy to forecast expense, build depreciation schedules, and compare projects. This calculator helps you compute the depreciable base and annual straight-line depreciation so you can plug consistent numbers into your books, budgets, or analysis.

How to use this calculator

Enter the asset’s cost, including purchase price and any capitalized costs (installation, freight, required upgrades).
Enter an estimated salvage value—the expected residual value at the end of the asset’s useful life. Use zero if you expect no resale or scrap value.
Enter the useful life in years, based on your internal accounting policy, industry norms, or tax class lives (if you are mirroring tax lives for planning).
Review the depreciable base and annual depreciation. Multiply the annual figure by the number of years to see the total depreciation taken over the life of the asset.
If you need a year-by-year schedule, you can multiply the annual amount by each year index and subtract from book value, or build a simple table in a spreadsheet using these outputs.

Inputs explained

Asset cost: The total capitalized cost of the asset, including purchase price and any necessary costs to get it ready for use (installation, delivery, required upgrades). Do not include operating costs here.
Salvage value: The estimated value of the asset at the end of its useful life. This might be a resale value, scrap value, or zero if you expect to retire the asset without selling it.
Useful life (years): The number of years over which you plan to depreciate the asset. This is often defined by your accounting policy, IRS/GAAP class lives, or management judgment about how long the asset will be productive.

Outputs explained

Depreciable base: The portion of the asset’s cost that will be depreciated over its life, equal to asset cost minus salvage value. This is the total amount of depreciation that will be recognized over the asset’s useful life under straight-line.
Annual depreciation: The constant yearly depreciation expense under straight-line, calculated as depreciable base divided by useful life in years. This amount would typically appear on your income statement each year while the asset is in service.

How it works

You enter the asset’s cost (or capitalized cost), its estimated salvage value at the end of its useful life, and the number of years you plan to depreciate it.

The depreciable base is calculated as Asset cost minus Salvage value. This represents the portion of the asset’s cost that will be allocated as depreciation over its life.

Annual straight-line depreciation is the depreciable base divided by the useful life in years. This produces a constant yearly expense as long as the asset remains in service.

In a basic straight-line model with full years, each year’s depreciation expense is identical. Book value declines by that amount each year until it reaches the salvage value.

This calculator does not handle partial-year conventions or accelerated methods; it focuses on the core straight-line formula for high-level planning and schedule building.

Formula

Depreciable base = Asset cost − Salvage value\nAnnual straight-line depreciation = Depreciable base ÷ Useful life (years)

When to use it

Building or checking depreciation schedules for equipment, vehicles, furniture, or leasehold improvements using straight-line accounting.
Estimating the annual impact of a proposed asset purchase on your income statement and book value.
Comparing the effect of different useful life assumptions on expense recognition and reported profitability.
Providing input to financial models or capital budgeting analyses that require a simple, steady depreciation expense.

Tips & cautions

Use your organization’s accounting policies or relevant tax class lives as starting points for useful life; consistency across similar assets is important.
If salvage value is small or uncertain, many practitioners set it to zero for simplicity, especially for assets likely to have little resale value at retirement.
For tax planning, keep in mind that tax depreciation (MACRS, Section 179, bonus) may differ significantly from book straight-line depreciation.
If you need partial-year depreciation (for example, half-year conventions) or accelerated methods, use this calculator for base values, then apply conventions in a separate schedule or tool.
This tool assumes full-year straight-line depreciation and does not model partial-year conventions (half-year, mid-quarter, mid-month).
It does not compute tax depreciation under MACRS, Section 179, or bonus depreciation rules; those require separate schedules or tax software.
It does not automatically build a year-by-year table or track book value; you will need to use the outputs to construct detailed schedules if required.
Useful life and salvage value estimates involve judgment; using unrealistic assumptions can misstate expense and book value.

Worked examples

$50,000 asset, $5,000 salvage, 5-year life

Depreciable base = $50,000 − $5,000 = $45,000.
Annual depreciation = $45,000 ÷ 5 = $9,000 per year.
Total depreciation over 5 years = $9,000 × 5 = $45,000; book value at end of life ≈ $5,000 (the salvage value).

$18,000 equipment, $0 salvage, 3-year life

Depreciable base = $18,000 − $0 = $18,000.
Annual depreciation = $18,000 ÷ 3 = $6,000 per year.
Book value decreases by $6,000 each year until it reaches $0 at the end of year 3.

Deep dive

Use this straight-line depreciation calculator to compute annual depreciation and the total depreciable base for fixed assets. Enter asset cost, salvage value, and useful life to see how much expense will be recognized each year under a simple straight-line method.

It’s useful for building depreciation schedules, forecasting income statement impact, and comparing different useful life assumptions. While it keeps the math straightforward, always align life and method with your accounting policies and tax rules.

Accountants, bookkeepers, and small-business owners can also use this tool as a quick sanity check before posting journal entries or reviewing fixed-asset registers. By experimenting with different salvage values and lives, you can see how sensitive annual expense is to your assumptions and decide whether a shorter or longer life better reflects how the asset will actually be used in your business.

FAQs

Does this calculator handle MACRS or accelerated depreciation methods?: No. It is designed for straight-line depreciation only. Tax depreciation systems like MACRS, bonus depreciation, or Section 179 expensing have their own schedules and conventions that must be modeled separately.
Do I have to include a salvage value?: Not necessarily. If you expect no meaningful residual value, you can set salvage to zero. If you expect to sell or scrap the asset for a non-trivial amount, including a salvage estimate helps avoid over-depreciating.
How do I handle assets placed in service mid-year?: This calculator uses full-year straight-line. For mid-year placements, many organizations apply a half-year rule or prorate the first and last year manually. You can still use the annual depreciation figure from this tool and apply your convention separately.
Can I use this for intangible assets like software or patents?: Conceptually yes, but intangibles are usually amortized rather than depreciated and may follow different rules. Check your accounting policy to confirm appropriate lives and methods for intangible assets.
Will book and tax depreciation always match?: Often they do not. Companies frequently use straight-line for financial reporting and more accelerated methods for tax purposes. This calculator focuses on straight-line and is best used for book or planning purposes unless your tax method matches.

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This straight-line depreciation calculator is for illustrative and planning purposes only. It does not constitute accounting or tax advice and does not implement all conventions or tax rules. Always confirm useful life, salvage value, and depreciation method with your accountant or tax advisor before booking entries or making tax decisions.