Straight-Line Depreciation Calculator
Calculate annual and monthly straight-line depreciation from asset cost, salvage value, and useful life — with a full year-by-year depreciation schedule showing accumulated depreciation and book value at the end of every period. Three modes: standard depreciation, reverse (find useful life), and partial-year prorated calculation.
Choose a depreciation mode
Standard mode calculates annual depreciation from cost, salvage value, and life. Use Reverse to find useful life from known depreciation. Use Partial Year for assets placed in service mid-period.
Know cost, salvage value, and useful life. Calculate annual depreciation and full schedule.
Know cost, salvage value, and annual depreciation. Find the implied useful life.
Asset placed in service mid-year. Calculate prorated first-year depreciation.
Straight-line formula
Annual depreciation = (Cost − Salvage value) ÷ Useful life
Monthly = Annual ÷ 12
Depreciable base = Cost − Salvage value (never changes each year)
When to use straight-line
Best for assets that wear evenly over time — buildings, furniture, office equipment, most intangibles. Not ideal for vehicles or machinery that lose value faster in early years (use declining balance instead).
Straight-line depreciation formula
The depreciable base (Cost − Salvage value) is constant — it never changes from year to year under straight-line. This is what distinguishes it from accelerated methods where the base changes as book value falls.
Common useful life guidelines by asset type
These are general guidelines. Your accounting policy, tax jurisdiction, and specific asset conditions determine the actual useful life. Under US GAAP, useful life is estimated based on expected economic benefit — under tax rules (MACRS), IRS-prescribed recovery periods apply regardless of actual use.
Frequently asked questions
What is straight-line depreciation?
Straight-line depreciation is an accounting method that spreads the cost of a fixed asset evenly over its useful life. Each year, the same dollar amount is charged as depreciation expense. Formula: (Cost − Salvage value) ÷ Useful life.
What is salvage value and how does it affect depreciation?
Salvage value (also called residual value) is the estimated amount the asset can be sold for at the end of its useful life. It is subtracted from cost before dividing — so a higher salvage value means a lower depreciable base and lower annual depreciation. If salvage value is zero, the entire cost is depreciated.
What happens at the end of the depreciation schedule?
The asset reaches its salvage value — book value equals salvage value and no further depreciation is recorded. The asset stays on the balance sheet at salvage value until it is disposed of, sold, or written off. Depreciation stops at salvage value — book value never goes below it under straight-line.
What is the difference between straight-line and declining balance depreciation?
Straight-line charges the same amount every year. Declining balance (including double-declining balance) applies a fixed percentage to the remaining book value each year — so charges are highest in year 1 and decrease over time. Declining balance is more realistic for assets like vehicles that lose value faster early in life. Straight-line is simpler and produces more stable financial statements.
How do I calculate depreciation for a partial first year?
Prorate the annual depreciation by the fraction of the year the asset was in service. For an asset placed in service in April (9 months remaining): First-year depreciation = Annual depreciation × (9 ÷ 12). Use Partial Year mode in this calculator to handle this automatically.
Is straight-line depreciation the same for book and tax purposes?
Not always. For financial reporting (GAAP/IFRS), companies choose the method that best reflects how the asset is used. For US federal taxes, MACRS (Modified Accelerated Cost Recovery System) is mandatory for most assets — it uses accelerated methods and IRS-prescribed recovery periods, not the company's estimated useful life.
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Disclaimer
This calculator uses the straight-line depreciation method for illustrative and planning purposes. Actual depreciation for financial reporting must follow applicable accounting standards (US GAAP, IFRS, or local GAAP) and your organisation's accounting policies. Tax depreciation is governed by jurisdiction-specific rules (e.g. MACRS in the US) and may differ materially from book depreciation. Consult a qualified accountant or tax adviser for formal reporting and tax treatment.