Equipment Depreciation Calculator
Calculate how your equipment loses value over time. Compare four depreciation methods side-by-side with a full year-by-year schedule.
Estimated value at end of useful life
Annual Depreciation (Year 1)
$4,500
Straight-Line Schedule
| Year | Beginning | Depreciation | Accumulated | Book Value |
|---|---|---|---|---|
| 1 | $25,000 | $4,500 | $4,500 | $20,500 |
| 2 | $20,500 | $4,500 | $9,000 | $16,000 |
| 3 | $16,000 | $4,500 | $13,500 | $11,500 |
| 4 | $11,500 | $4,500 | $18,000 | $7,000 |
| 5 | $7,000 | $4,500 | $22,500 | $2,500 |
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Start tracking freeUnderstanding Equipment Depreciation
Depreciation allocates the cost of a physical asset over its useful life. The method you choose affects your annual expense and tax deductions.
- Straight-Line is the simplest: equal expense each year. Best for assets that lose value evenly (furniture, fixtures).
- Declining Balance front-loads depreciation. Higher expense in early years, lower later. Common for vehicles and machinery.
- Double Declining Balance is the most aggressive accelerated method. Useful when assets lose value quickly (computers, phones).
- Sum-of-Years' Digits is another accelerated method that falls between straight-line and double declining in aggressiveness.
For U.S. tax depreciation, see our MACRS Depreciation Calculator which uses IRS Publication 946 rates.
Need to estimate what your equipment will be worth at end of life? Try our Salvage Value Calculator with industry benchmarks.
Frequently Asked Questions
Which depreciation method should I use?
It depends on how your asset loses value. Straight-line works for most cases. Use an accelerated method (declining balance or double declining) for assets that lose value quickly in early years, like technology or vehicles. Toggle “Compare all methods” above to see the difference.
What is salvage value?
Salvage value (also called residual value) is what you expect the equipment to be worth at the end of its useful life. It could be the resale price, scrap value, or trade-in amount. Total depreciation equals purchase price minus salvage value.
Is this calculator for tax purposes?
This calculator uses standard accounting depreciation methods. For U.S. tax depreciation, the IRS requires MACRS (Modified Accelerated Cost Recovery System) with specific property classes and recovery periods. Always consult a tax professional for filing decisions.
How do I determine useful life?
Useful life is how long you expect to use the equipment before replacing it. Common estimates: computers 3-5 years, vehicles 5-7 years, furniture 7-10 years, heavy equipment 10-15 years. The IRS publishes standard recovery periods for tax purposes.
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