Spread an asset's cost over its useful life and see the depreciation, accumulated depreciation and book value for every year, by four standard accounting methods.
Estimates for planning, not financial, tax or legal advice. Figures use US rules unless the page says otherwise.
The four methods
Each method spreads the depreciable base (cost − salvage value) over the asset's life. They differ in timing.
Straight-line: (cost − salvage) ÷ life, every year
Declining balance: book value at the start of the year × rate ÷ life
Sum-of-years' digits: (cost − salvage) × years left ÷ (1 + 2 + … + life)
Units of production: (cost − salvage) ÷ total units × units used this year
Declining balance never takes the book value below salvage. With "switch to straight-line" on, each year it uses whichever is larger: the declining balance amount or the remaining base spread evenly over the years left. That's how Excel's VDB works, and it fully depreciates the asset by the end of its life. Without the switch (like Excel's DDB), some value can be left above salvage at the end.
Worked example
A $10,000 machine with a $1,000 salvage value and a 5-year life:
| Year | Straight-line | Double declining | Sum-of-years' digits |
|---|
| 1 | $1,800 | $4,000 | $3,000 |
| 2 | $1,800 | $2,400 | $2,400 |
| 3 | $1,800 | $1,440 | $1,800 |
| 4 | $1,800 | $864 | $1,200 |
| 5 | $1,800 | $296 | $600 |
| Total | $9,000 | $9,000 | $9,000 |
Double declining uses 2 ÷ 5 = 40% of book value each year. In year 5, 40% of $1,296 would be $518.40, but only $296 is left above salvage, so that's the cap.
This is not MACRS
For US federal taxes, most business property placed in service after 1986 must use MACRS, which has its own recovery periods, conventions (like half-year and mid-quarter), no salvage value, and published percentage tables. The schedules here are the standard book (financial accounting) methods. For tax depreciation, use the tables in IRS Publication 946 or tax software. This calculator also assumes full years: it doesn't prorate a first year that starts mid-year.
Sources
How we checked this
Before every update, this calculator is run in a real browser with these known answers, and it must match all of them:
- Straight-line: $10,000, $1,000 salvage, 5 years = $1,800 a year ✓
- Double declining, no switch: year 5 is capped at $296 ✓
- Double declining with switch to straight-line, $0 salvage: $1,080 in years 4 and 5 ✓
- Sum-of-years' digits: year 1 is 5/15 of $9,000 = $3,000 ✓
- Units of production: 25,000 of 90,000 units = $2,500 ✓
- Salvage above cost is caught ✓
Last checked October 26, 2026. Spotted something wrong? The math is done in your browser with the formula shown on this page, so you can check any result by hand.
Questions people ask
How do I calculate straight-line depreciation?
Subtract the salvage value from the cost and divide by the useful life. ($10,000 − $1,000) ÷ 5 = $1,800 a year.
What is double declining balance?
A declining balance method with a rate of 200% ÷ life. Each year's depreciation is that rate times the book value at the start of the year, so it's largest in year 1.
What is sum-of-years' digits?
Add the year numbers (1 + 2 + 3 + 4 + 5 = 15 for 5 years). Year 1 takes 5/15 of the base, year 2 takes 4/15, and so on.
Can I use this for my taxes?
Not for most US business property. Federal tax depreciation uses MACRS, described in IRS Publication 946. This calculator shows book depreciation.
Which method should I use?
Straight-line is the simplest and most common for financial statements. Accelerated methods suit assets that lose value fast or are used most when new. Units of production fits assets that wear with use, like vehicles.