Calculate a depreciation schedule by straight-line, declining balance, double declining, sum-of-years' digits or units of production, with book value.
Straight-line writes off $9,000.00 in the first year and $45,000.00 over 5 years, leaving a book value of $5,000.00.
| Year | Depreciation | Accumulated | Book value |
|---|---|---|---|
| 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 spreads an asset's cost, less its expected salvage value, over its useful life. Straight-line charges the same amount every year, (cost − salvage) ÷ life. Declining balance applies a fixed rate to the book value left, so charges fall year by year; double declining uses 2 ÷ life. Sum-of-years' digits weights year t by (n − t + 1) ÷ (n(n + 1)/2), and units of production charges a fixed amount per unit made.
With the defaults, an asset costing 50,000 with a salvage value of 5,000 and a 5-year life, straight-line depreciation is 9,000 a year, 20% of the depreciable amount. Double declining balance would charge 20,000 in the first year and sum-of-years' digits 15,000; every method writes off the same 45,000 in total.
These are book-accounting methods. US tax depreciation follows MACRS recovery periods and conventions in IRS Publication 946, which this schedule does not apply.
Checked against: Microsoft SLN documentation example: SLN(30000, 7500, 10) = 2,250
Checked against: Microsoft SYD documentation example: year 1 = 4,090.91, year 10 = 409.09
Checked against: Microsoft DDB documentation example: first year 480.00, tenth year 22.12
Checked against: Python decimal: 4000, 2400, 1440, then SL 2160/2 = 1080 beats DDB 864 in years 4–5
Subtract the salvage value from the cost and divide by the useful life in years. An asset costing 50,000 with a 5,000 salvage value and a 5-year life depreciates by (50,000 − 5,000) ÷ 5 = 9,000 a year, leaving a book value of 5,000. Excel's SLN function does the same: SLN(30000, 7500, 10) = 2,250.
Multiply the start-of-year book value by 2 ÷ life, and stop when the book value reaches salvage. For 50,000 over 5 years the rate is 40%: 20,000 in year 1, then 12,000, 7,200 and 4,320, and 1,480 in year 5 to land on the 5,000 salvage. With zero salvage the rate never reaches zero, so companies switch to straight-line when it gives a larger charge.
IAS 16 names straight-line, diminishing balance and units of production, and asks for the method that reflects how the asset's benefits are used up. It does not list sum-of-years' digits, and paragraph 62A prohibits methods based on the revenue an asset generates.
Most business property uses MACRS (IRS Publication 946): cars are 5-year property, office furniture 7-year, residential rental buildings 27.5 years and nonresidential real property 39 years. Personal property is depreciated at 200% declining balance switching to straight-line, with a half-year convention unless more than 40% is placed in service in the last quarter (mid-quarter), and real property uses mid-month.
For 2025, US businesses can expense up to $2,500,000 of qualifying property under Section 179, reduced once purchases exceed $4,000,000; for 2026 the figures are $2,560,000 and $4,090,000 (IRS Publication 946). Bonus depreciation is 100% for qualifying property acquired and placed in service after January 19, 2025.
Accuracy depends on your inputs and the method's assumptions. Decimal arithmetic uses 50 significant digits, but estimates, numerical methods and source data can be less precise; the displayed rounding does not remove those limits. It is checked against 9 worked examples whose answers come from independent sources; for example, “Straight-line 30,000 cost, 7,500 salvage, 10 years” is checked against Microsoft SLN documentation example: SLN(30000, 7500, 10) = 2,250.
Microsoft Support — SLN, DDB, DB and SYD functions; IRS Publication 946 — How to Depreciate Property.
For planning only. Lenders, tax authorities and markets apply their own rounding, fees and rules; confirm figures with them before you commit.
9 worked examples with independently sourced answers ship with this calculator. They run in the test suite; you can run them here too.
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