Depreciation Calculator

Use this calculator to estimate annual depreciation.

What this calculator does

The depreciation calculator helps estimate annual straight-line depreciation for an asset.

It is useful for:

• accounting estimates
• budgeting
• asset planning
• financial analysis

Formula

Annual Depreciation = (Asset Cost - Salvage Value) ÷ Useful Life

Where:

• Asset Cost = original cost of the asset
• Salvage Value = estimated value at the end of useful life
• Useful Life = expected number of years used
• Annual Depreciation = yearly depreciation expense

Example calculation

If:

• Asset cost = 100000
• Salvage value = 10000
• Useful life = 5

Then:

• Annual depreciation = (100000 - 10000) ÷ 5
• Annual depreciation = 18000

What is depreciation?

Depreciation is the accounting process of spreading an asset’s cost over its useful life.

Why depreciation matters

This calculation helps businesses:

• estimate non-cash expense
• plan replacement cycles
• improve reporting
• support budgeting

When to use this calculator

Use this calculator when you want to:

• estimate asset expense
• build budgets
• prepare financial statements
• review capital investment impact

Common mistakes

Common mistakes include:

• ignoring salvage value
• using the wrong useful life
• mixing tax and accounting methods
• confusing depreciation with cash cost

Depreciation vs amortization

These are closely related.

• Depreciation applies to tangible assets
• Amortization applies to intangible assets

Related calculations

You may also want to use:

• EBITDA Calculator
• Operating Profit Calculator
• Investment Return Calculator

FAQs

What does this calculator do?

It helps you estimate annual straight-line depreciation.

Why is depreciation important?

It helps spread asset cost over time for better accounting and planning.

Is this a tax depreciation calculator?

No. This version is a simple straight-line depreciation estimate.