Straight-Line Depreciation Calculator
Straight-line depreciation — the same charge every year — with the book value at any point and the total written off.
Straight line spreads cost less salvage evenly over the useful life.
How the straight-line depreciation calculator works
Straight line spreads cost less salvage evenly over the useful life. It is the simplest method and the most common, because it matches the way most assets are actually consumed and because it produces a stable expense line.
The part worth checking is salvage value: a 40,000 asset with a 6,000 salvage depreciates 34,000, not 40,000. Getting that wrong overstates the annual charge by nearly a fifth.
Formula: annual = (cost − salvage) / useful life
Worked examples
| Inputs | Annual depreciation | Note |
|---|---|---|
| 40,000 asset, 6,000 salvage, 8 years | 4,250 | 4,250 a year |
| No salvage | 5,000 | 5,000 a year |
| Fully depreciated | 4,250 | book value equals salvage |
FAQFrequently asked questions
How does straight-line depreciation work?
Subtract salvage value from cost and divide by the useful life. The same amount is charged every year.
What is salvage value?
What you expect the asset to be worth at the end of its useful life. It reduces the amount you depreciate, not the cost.
Why use straight line rather than reducing balance?
It matches assets consumed evenly, keeps the expense line stable, and is what most accounting standards default to for buildings and fittings.
Does the tax authority accept my useful life?
Not necessarily. Tax depreciation often uses prescribed rates that differ from the accounting life, which is why the two sets of books diverge.
What happens after the asset is fully depreciated?
It sits at salvage value on the balance sheet until it is sold or scrapped. No further depreciation is charged.
Where these figures come from
- Corporate Finance Institute — EBITDA — why EBITDA is a non-GAAP measure with no single definition
- US SEC — Non-GAAP Financial Measures, Compliance & Disclosure Interpretations — the disclosure rules that exist precisely because EBITDA is not standardized
- US Securities and Exchange Commission — the US securities regulator
Last checked: September 2026. These are standard management-accounting definitions; where a term has no single agreed definition, the page says so.