📉 Depreciation Calculator

Depreciation Methods Explained

Straight-Line Depreciation

The straight-line method is the simplest and most widely used depreciation approach. It allocates an equal amount of depreciation expense to each year of the asset's useful life. The formula is: Annual Depreciation = (Cost - Salvage Value) / Useful Life. This method is appropriate for assets that provide relatively even utility over time, such as buildings, office furniture, and fixtures.

Double Declining Balance (DDB)

DDB is an accelerated depreciation method that applies twice the straight-line rate to the asset's declining book value each year. The rate is 2 × (1 / Useful Life). Unlike straight-line, DDB does not subtract salvage value initially but stops depreciating when the book value reaches the salvage value. This method is ideal for assets that lose value rapidly, such as vehicles, computers, and machinery.

When to Use Each Method

Choose straight-line for assets with consistent utility and when you prefer predictable expenses. Choose DDB when the asset's productivity declines significantly over time, or when you want to maximize tax deductions in the early years. Many businesses use DDB for equipment and straight-line for buildings.