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Straight-Line Depreciation Calculator

Calculate annual depreciation, monthly depreciation, accumulated depreciation, book value, and partial-year depreciation with a student-friendly schedule, journal entries, and financial statement impact.

Background

Under the straight-line method, the depreciable cost of an asset is spread evenly over its useful life. This makes it one of the most common and most important depreciation methods in Financial Accounting. This calculator is designed to help students not just get the answer, but also understand the logic behind it.

Enter values

Tip: Basic mode is the fastest way to learn the core formula. Partial-year mode is best for textbook problems with in-service dates.

What this calculator can show

Depending on the mode, this calculator can show the depreciable base, annual depreciation, monthly depreciation, accumulated depreciation, ending book value, a depreciation schedule, journal entries, and the effect on the income statement, balance sheet, and statement of cash flows.

Basic straight-line inputs

Use this to calculate accumulated depreciation and book value at a chosen point.

Partial-year depreciation inputs

Best for textbook and homework problems where the asset is placed in service during the year, uses a fiscal year-end, or is sold before the end of its useful life.

1) Asset basics

Enter the asset’s cost, salvage value, and useful life.

Core inputs

Tip: This date starts depreciation. If the asset is placed in service late in the year, first-year depreciation will usually be smaller than a full year.

2) Fiscal year setup

Tell the calculator where the accounting year ends and how you want periods labeled.

Fiscal year

Leave the label base blank to let the calculator auto-name fiscal years.

3) Partial-year engine

Choose how the first year is prorated and how detailed the schedule should be.

Proration

Exact day-count is the tightest option. Monthly schedule is best when you want to see depreciation build period by period.

4) Optional sale / disposal snapshot

Use this only if the asset is sold or retired before the end of its life.

Optional

If you enter both a disposal date and sale proceeds, the calculator will estimate book value on disposal and calculate gain or loss.

5) Optional highlighted period

Choose which fiscal year or month should be emphasized in the result summary.

Snapshot

This controls which row gets highlighted for the journal entry, statement impact, and book value snapshot.

Reverse-solve inputs

Enter the known values and leave the target value blank, or ignore it. The calculator will solve for the selected target.

Full schedule / statement view inputs

This is the year you want highlighted for journal entry and statement impact.

Options

Chips prefill and calculate immediately.

Result

No results yet. Enter values and click Calculate. A great starting example is cost 18,000, salvage 3,000, life 5 years.

How to use this calculator

  • Choose one of the 4 modes: Basic, Partial Year, Reverse Solve, or Full Schedule / Statement View.
  • In Basic mode, enter cost, salvage value, useful life, and optionally years elapsed to get annual depreciation, accumulated depreciation, and book value.
  • In Partial Year mode, enter the in-service date, fiscal year-end, and your preferred convention to estimate first-year depreciation, later full-year amounts, optional monthly schedules, and optional sale/disposal snapshots.
  • In Reverse Solve mode, choose what you want to solve for, then enter the known values.
  • In Full Schedule mode, generate a year-by-year schedule and see the journal entry and financial statement effect for a selected year.
  • Click Calculate to see the answer, explanation, schedule, journal entry, and statement impact.

How this calculator works

  • Straight-line depreciation spreads the depreciable base evenly across the asset’s useful life.
  • Depreciable Base = Cost − Salvage Value
  • Annual Depreciation = (Cost − Salvage Value) / Useful Life
  • Monthly Depreciation = Annual Depreciation / 12
  • Accumulated Depreciation = Depreciation recorded to date
  • Book Value = Cost − Accumulated Depreciation
  • For partial-year problems, the calculator can prorate the first year using exact days, exact months, full-month convention, or half-year convention. It can then continue with yearly or monthly schedules and optionally stop at a disposal date.

Formula & Equations Used

Depreciable base: Cost − Salvage Value

Annual straight-line depreciation: (Cost − Salvage Value) / Useful Life

Monthly depreciation: Annual Depreciation / 12

Accumulated depreciation after n years: Annual Depreciation × n (or schedule total to date)

Book value: Cost − Accumulated Depreciation

Partial-year depreciation: Annual Depreciation × fraction of year

Example Problem & Step-by-Step Solution

Example 1 - Equipment costing \$18,000 with \$3,000 salvage value and 5-year useful life

  1. Find the depreciable base: 18,000 − 3,000 = 15,000
  2. Find annual depreciation: 15,000 / 5 = 3,000
  3. Find monthly depreciation: 3,000 / 12 = 250
  4. After 2 years, accumulated depreciation is: 3,000 × 2 = 6,000
  5. Book value after 2 years: 18,000 − 6,000 = 12,000

So the annual depreciation is \$3,000, the monthly depreciation is \$250, accumulated depreciation after 2 years is \$6,000, and book value after 2 years is \$12,000.

Journal entry each full year

Debit Depreciation Expense \$3,000
Credit Accumulated Depreciation \$3,000

Example 2 - Partial-year depreciation using exact day-count

A company buys equipment for \$24,000, expects a \$4,000 salvage value, and uses it for 5 years. The asset is placed in service on October 1, and the company’s fiscal year ends on December 31.

  1. Find the depreciable base: 24,000 − 4,000 = 20,000
  2. Find annual depreciation: 20,000 / 5 = 4,000
  3. Find the exact day-count fraction for the first fiscal year: October 1 to December 31 is 92 days out of 365
  4. First-year depreciation: 4,000 × (92 / 365) ≈ 1,008.22
  5. Book value at the end of the first fiscal year: 24,000 − 1,008.22 = 22,991.78

So the first-year partial depreciation is about \$1,008.22. After that, the middle years usually use the full annual amount, and the final year is adjusted so the asset ends exactly at its salvage value.

Example 3 - Book value on disposal and gain or loss

A machine costs \$15,000, has \$3,000 salvage value, and a 4-year useful life. It is sold after 2 years for \$10,500.

  1. Find the depreciable base: 15,000 − 3,000 = 12,000
  2. Find annual depreciation: 12,000 / 4 = 3,000
  3. Find accumulated depreciation after 2 years: 3,000 × 2 = 6,000
  4. Find book value on disposal date: 15,000 − 6,000 = 9,000
  5. Compare sale proceeds with book value: 10,500 − 9,000 = 1,500

Because the asset was sold for more than its book value, the company records a \$1,500 gain on disposal.

Frequently Asked Questions

Q: What is straight-line depreciation?

Straight-line depreciation is a method that spreads an asset’s depreciable cost evenly over its useful life.

Q: What is depreciable cost?

Depreciable cost, also called the depreciable base, is the asset’s cost minus its expected salvage value.

Q: What is book value?

Book value is the asset’s cost minus accumulated depreciation recorded to date.

Q: Does depreciation affect cash?

Depreciation expense reduces net income, but it is a non-cash expense. That is why it is added back in the operating section of the statement of cash flows under the indirect method.

Q: Why can’t salvage value be greater than cost?

Because that would make the depreciable base negative, which does not make sense for straight-line depreciation.