Depreciation Calculator

This depreciation calculator helps to calculate depreciation by using four different methods to estimate how fast the value of an asset decreases over time.

You can use this depreciation rate calculator to compare the given depreciation methods and decide which one suits you best!

• Straight Line Depreciation Method
• Double Declining Balance Method
• Sum of The Year’s Digits
• Reducing Balance Method

What Is Deprecation?

Depreciation is said to be a non-cash expense that reduces the value of an asset as a result of age, wear and tear, or obsolescence over the period of its useful life. In generic term, depreciation is the decrease in value.

What Ae the Most Common Methods of Depreciation?

There are various methods that are used by the companies to perform depreciation calculation, but the most common methods are:

Straight Line Method of Depreciation:

Straight Line Depreciation or SLD is a very common and the simplest method that helps to calculate depreciation expense. In simple words, with straight-line depreciation, the expense amount is the same every year over the useful life of an asset. The SLD incorporates a salvage value (an estimated value that an owner would receive when selling an asset at the end of its useful life.

Double-Declining Depreciation Method (DDD):

Well, this depreciation method is one that involves a double depreciation rate. The DDD reflects the fact that assets are often more productive in their early years than in their later years.

Additionally, the practical fact reveals that any asset (think of buying a new car) loses more its value in the very first few years of its use. Yes, with the DDD balance method, the depreciation factor is 2x that of the SLD or Straight Line Depreciation method.

Sum of Years’ Digits Method:

The Sum of Year’s Digits Method is known as an accelerated depreciation method that recognizes depreciation at an accelerated rate. That’s why the depreciable amount of an asset is charged to a fraction over different accounting period under this sum of year’s digit method.

Reducing Balance Method:

Reducing Balance Depreciation method is also known as diminishing balance method, Written down value method, and Fixed percentage on diminishing balance. According to this method of depreciation, the depreciation is charged on reducing balance & a fixed rate. In such case, depreciation is charged over the useful life of an asset over its written down value.

How to Calculate Depreciation with this Tool:

You have to follow the given steps to calculate simple depreciation of assets:

Inputs:

• First of all, you have to select depreciation method from the drop-down menu (it can be either Straight Line, Declining Balance, Sum of the Year’s Digits, or Reducing Balance Method)
• Very next, you ought to add ‘asset cost’ into the designated field
• Right after, you have to add ‘salvage value’ into the designated field
• Now, you have to add ‘depreciation years’ into the given field
• Then, you can select ‘Yes’ or ‘No’ option from the given field of ‘Round to Dollars’
• Now, you have to select Full-Month, Mid-Month, Mid-Year or Mid-Quarter Convention, if you don’t know, then keep it at the common Full-Month
• At last, you have to enter the date of the asset was placed in service

Note: When you select Declining Balance Method, the ‘Depreciation Factor’ field appears in which you have to enter the value!

Result:

• The calculator instantly shows depreciation schedule year by year. This schedule includes (Beginning Book Value, Depreciation Percent, Depreciation Amount, Accumulated Depreciation Amount, and Ending Book Value)
• Also, our calculator provide you “Ending Book Value Graph Year By Year)

Calculate Car Depreciation with this Calculator:

Our car depreciation calculator helps you to calculate how much your car will be worth after a number of years. This calculator for a car depreciation is also estimated the first year and the total vehicle depreciation.

Stick to the following steps to calculate car depreciation expense:

Inputs:

• First, you have to enter the purchase price of the car into the given field
• Very next, you have to enter the current age of the vehicle – if the car is new, then simply enter ‘0’
• Then, you have to enter the number of years you will own the car
• Now, you have to choose your car’s depreciation rate from the drop-down list. You can select four-car depreciation rates that includes: high, average, low and custom

Results:

• This depreciation calculator shows your car depreciation schedule year by year including (Beginning Book Value, Depreciation Percent, Depreciation Amount, Accumulated Depreciation Amount, and Ending Book Value)
• Also, the calculator shows you “Ending Book Value Graph” year by year

Calculate Property Depreciation with this Calculator:

Our property depreciation calculator helps to calculate depreciation of residential rental or nonresidential real property. This calculator performs calculation of depreciation according to the IRS (Internal Revenue Service) that related to 4562 lines 19 and 20.

It is quite easy to use, just follow the given steps to calculate your property depreciation expense:

Inputs:

• First, you have to enter the original value of your property or the depreciable cost into the designated field
• Then, you have to enter the number of years during which the cost basis of an item of property is recovered
• Now, select ‘Yes’ or ‘No’ from the designated field of Round to Dollars
• Finally, you have to add the month, day, and the year the property started being used for its intended purpose

Results:

• The depreciation calculator shows your property depreciation schedule year by year, the schedule includes (Beginning Book Value, Depreciation Percent, Depreciation Amount, Accumulated Depreciation Amount, and Ending Book Value)
• Also, shows you the “Ending Book Value Graph Year By Year”

FAQ’s:

What is the normal depreciation rate for cars?

No doubt, different cars depreciate at different rates, according to the rule of thumb it is better to assume that a new car will lose approximately 20% of its value in the first year and only 15% per year after that until, however, right after 10 years; the worth of car is around 10% of what it originally cost.

What is the annual depreciation rate?

The total amount which is depreciated per year, indicated as a percentage, it is said to be as the depreciation rate.

For instance:

If a firm has had $100,000 in total depreciation over the asset’s expected life, and the annual depreciation said as $15,000; then the annual rate would 15% per year.

How do I calculate accumulated depreciation?

Accumulated depreciation for the first year is equals the depreciation for that year, from year two, accumulated depreciation is said to be as the depreciation expense for previous year and every year up until the current year!

What is asset depreciation?

Asset depreciation is referred to as an accounting method of allocating the cost of a tangible or physical asset over its useful life or life expectancy. Depreciation indicates how much of an asset’s value has been used up.

References:

From Wikipedia, the free encyclopedia – Depreciation definition accountancy – Accounting concept – Depreciable basis – Impairment – Depletion and amortization – Effect on cash – Accumulated depreciation

From the source of wikihow – Business Finances – Accounting – By Co-authored by Michael R. Lewis (Entrepreneur & Financial Advisor) – How to Calculate Double Declining Depreciation – Tips About Double Declining Balance Depreciation