Free tool
Depreciation calculator
Straight line against written down value, side by side — the year-one charge, the closing book value, and the schedule that explains why finance and procurement quote different numbers for the same laptop.
How do you calculate depreciation on equipment?
Straight line depreciation is the purchase price minus salvage value, divided by useful life — the same charge every year. Written down value applies a fixed percentage to the remaining book value, so the charge falls each year. Enter the figures below to see both, year by year, for the same asset.
Year-one charge
$760written down value
$425straight line
- Year 1 — straight line
- $425
- Year 1 — WDV
- $760
- Ends at — straight line
- $200
- Ends at — WDV
- $246
| Year | Depreciation | Closing book value |
|---|---|---|
| 1 | $425 | $1,474 |
| 2 | $425 | $1,050 |
| 3 | $425 | $625 |
| 4 | $425 | $200 |
Reading the result
What the two curves actually mean
Straight line is a straight line
The same charge every year, so the book value falls at a constant rate to its salvage floor. It is the simplest to explain to anyone who asks why an asset is worth what the register says.
Written down value front-loads
A percentage of what is left means the first year takes the biggest hit. It matches how equipment actually loses resale value, and it reduces taxable profit sooner where the method is permitted.
The total is nearly the same
Both methods write off the asset. What differs is timing — which is why the method matters for this year's accounts and barely matters across the asset's whole life.
FAQ
Depreciation questions
What is the difference between straight line and written down value depreciation?
Straight line writes off the same amount every year: cost minus salvage, divided by useful life. Written down value takes a fixed percentage of the remaining book value, so the charge is largest in year one and shrinks each year. Both write off a similar total — they differ in when.
Which method should I use for IT equipment?
Straight line is the common choice for laptops and monitors, because the accounting is simple and the value genuinely does decline steadily in use. Written down value suits assets that lose most of their worth immediately, and is mandated for many asset classes in some jurisdictions — India's Companies Act being the example people meet most often.
How do you calculate written down value?
Multiply the current book value by the depreciation rate. Year one is cost x rate; year two is (cost - year one charge) x rate, and so on. Because each year applies the rate to a smaller base, the value approaches zero without reaching it, which is why a salvage floor is used.
What is salvage value?
What you expect to recover at the end of the asset's useful life — resale, trade-in or scrap. It is subtracted before straight-line depreciation is spread, and acts as the floor the book value cannot fall below.
Does this calculator handle tax depreciation?
No. It calculates book depreciation for your own records. Tax depreciation follows rules set by your jurisdiction — capital allowances, MACRS, prescribed rates — which differ from the accounting treatment and change more often. Ask your accountant for the tax figure.
Is the calculation saved anywhere?
No. Everything runs in your browser; nothing is sent to us or stored. Refreshing the page clears it.
Depreciation, without the spreadsheet
Stackroom holds purchase price, method and useful life against each asset, so book value is a column rather than a quarterly exercise.