How it works

A useful distinction

Depreciation expense is not cash spent again

An asset bought for 12,000 and depreciated by 2,000 this year does not require another 2,000 cash payment. Keep the purchase cash flow separate from the accounting expense when building a business forecast.

Allocating asset cost across accounting periods

Book depreciation spreads the depreciable amount across periods according to the selected method. Enter the asset cost, residual value, and useful life consistently, and use the fiscal-year mode when the acquisition date affects the schedule. The remaining book value is an accounting result rather than a prediction of resale price. Tax depreciation can follow separate rules from the displayed book schedule.

Asset depreciation: formula and assumptions

Straight-line = (cost−salvage)/life. Accelerated methods apply a changing share over the useful life.

These are mathematical book-depreciation schedules, not a complete tax depreciation/MACRS calculation.

Fiscal-year book depreciation: formula and assumptions

Declining depreciation = min(remaining basis, book value × factor / life × year fraction).

Select a partial-year convention and optional permanent switch to straight-line. This is a generic book-depreciation scenario; it does not determine MACRS, bonus or section 179 eligibility.

Worked example

Reference example currency: USD. These fixed examples do not change with your calculator preferences.

Using the Asset depreciation example:

Inputs

Asset cost ($): 50000
Salvage value ($): 5000
Useful life (years): 5
Method: Straight-line

Method

Straight-line = (cost−salvage)/life. Accelerated methods apply a changing share over the useful life.

Result

Example result

Depreciable amount: $45,000.00

First-year depreciation: $9,000.00

These are illustrative inputs. Change the values to explore a different scenario.

Formula references

References explain the underlying methods; they do not imply endorsement or individual professional review of Finflo.

Common questions

Is this a complete tax-depreciation calculation?

No. These are book-depreciation scenarios. MACRS, bonus depreciation and section 179 eligibility are not determined.

What does the fiscal-year mode add?

It accepts a service date, fiscal-year start, declining factor and partial-year convention. It can switch permanently to straight-line when that gives the higher annual rate.

Will every declining-balance schedule reach salvage value?

Not necessarily. With the straight-line switch disabled, the model leaves unused basis rather than forcing a final writeoff.

Prepared by Finflo. See our methodology and editorial policy. Read the relevant professional-advice limitations.

Year	Depreciation (USD)	Accumulated (USD)	Book value (USD)
1	9,000.00	9,000.00	41,000.00
2	9,000.00	18,000.00	32,000.00
3	9,000.00	27,000.00	23,000.00
4	9,000.00	36,000.00	14,000.00
5	9,000.00	45,000.00	5,000.00

Depreciation Calculator

Your inputs

Asset value over time

Detailed breakdown