Depreciation Calculator
Choose a method, enter the asset details, and see the complete yearly depreciation schedule.
Asset Details
First-Year Depreciation
The 5 depreciation methods — what they are and why to use them
1. Straight Line Method (SLM)
How it works: Depreciation = (Cost − Salvage Value) ÷ Useful Life. The same amount is written off every year, so the yearly depreciation is constant.
Why use it: It is the simplest method and is best for assets whose service is used evenly every year — buildings, office furniture, leasehold improvements, fixtures. It gives a stable, predictable charge to profit each year, which accountants and small businesses prefer for planning.
2. Written Down Value (WDV) / Diminishing Balance Method
How it works: A fixed percentage rate is applied to the opening book value of each year, not the original cost. Depreciation is therefore high in early years and falls every year as the book value shrinks.
Why use it: Most real assets — vehicles, plant and machinery, electronics, computers — lose far more value in their first years than in their last. WDV matches this reality and it is also the method prescribed for most assets under income-tax rules in India and many other countries, which keeps book and tax depreciation aligned.
3. Double Declining Balance (DDB)
How it works: It is WDV applied at double the straight-line rate (2 ÷ life × 100%). The book value can never fall below the salvage value.
Why use it: Use DDB when an asset loses value even faster than WDV assumes — high-tech equipment, servers, software, machinery subject to rapid obsolescence. It front-loads the maximum depreciation, which also defers taxable profit to later years when the asset is usually less productive.
4. Units of Production Method
How it works: Depreciation per unit = (Cost − Salvage) ÷ Total Estimated Units. Each year's charge = units produced × depreciation per unit.
Why use it: This is the fairest method for assets that wear out through use, not time — mining equipment, delivery vehicles, printing presses, manufacturing machines. The expense lands in the same year the output is generated, which is an excellent matching of cost with revenue.
5. Sum of the Years' Digits (SYD)
How it works: Digits are summed (5-year life → 5+4+3+2+1 = 15). Year 1 writes off 5/15 of the depreciable base, Year 2 writes off 4/15, and so on. Salvage value is preserved.
Why use it: SYD is a middle path between SLM and WDV. It gives a strong, front-loaded charge but still ends exactly at the salvage value over the asset's life — ideal for vehicles, heavy equipment and any asset whose early years are far more productive than its later ones, when a simple declining percentage feels too aggressive.
Depreciation FAQ
On this page
Depreciation Calculator — five methods with a full schedule
Depreciation allocates an asset's cost over its useful life. This advanced calculator supports all five major methods — Straight Line (SLM), Written Down Value (WDV), Double Declining Balance (DDB), Units of Production (UoP) and Sum of Years' Digits (SYD) — with a complete yearly schedule and chart.
The five methods compared
Straight Line (SLM): equal depreciation every year. Simple, used for financial reporting.
Written Down Value (WDV): a fixed percentage of the reducing balance. This is the method prescribed for income tax in India for most assets.
Double Declining Balance (DDB): accelerates depreciation — twice the SLM rate, reducing each year. Useful for tech assets.
Units of Production (UoP): depreciates by actual usage/output — best for vehicles and machinery.
Sum of Years' Digits (SYD): accelerated but more gradual than DDB, based on remaining life fractions.
Indian tax depreciation rules
Under the Income Tax Act, buildings depreciate at 10% (WDV, on a 10% block), furniture at 10%, plant & machinery at 15%, cars at 15%, computers at 40%.
Half of the normal rate applies in the year of acquisition if the asset is used for less than 180 days.
For accounting, companies follow the Companies Act 2013 using useful-life schedules, often different from tax rates — hence the separate book and tax schedules.
How to use this calculator
- Enter the asset's original cost.
- Enter the salvage (scrap) value at the end of life.
- Set the useful life in years.
- Choose the method (and rate/units for WDV or UoP).
- Read first-year depreciation, total depreciation and the yearly schedule.
Pro tips
- Use WDV for tax compliance in India and SLM for internal book accounting.
- Vehicles and equipment: Units of Production is the most accurate reflection of wear.
- DDB is aggressive; combine with a salvage floor to avoid depreciating below scrap.