Accumulated Depreciation Calculator
Calculate the total accumulated depreciation and current book value of an asset using the straight-line depreciation method.
How to use this tool
- Enter original asset cost, salvage (residual) value, useful life and years of depreciation elapsed in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your accumulated depreciation and the full breakdown beneath it.
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
Straight-line annual depreciation:
D = (Cost − Salvage Value) / Useful Life
Accumulated depreciation after t years:
Acc. Dep. = D × t
Book value:
Book Value = Cost − Accumulated Depreciation
How it works
Straight-line depreciation spreads the depreciable cost of an asset (original cost minus salvage value) evenly over its useful life, resulting in an equal charge each accounting period. Accumulated depreciation is simply the annual charge multiplied by the number of years the asset has been in use, capped at the total depreciable base.
This calculator uses the straight-line method, the simplest and most common approach under both GAAP and IFRS. Other methods (declining balance, sum-of-years'-digits, units of production) allocate costs differently and are not covered here.
Worked example
$50,000 asset, $5,000 salvage, 10-year life, 4 years elapsed
- Depreciable base = $50,000 − $5,000 = $45,000.
- Annual depreciation = $45,000 / 10 = $4,500 per year.
- Accumulated depreciation after 4 years = $4,500 × 4 = $18,000.
- Book value = $50,000 − $18,000 = $32,000.
Accumulated depreciation = $18,000; current book value = $32,000.
Common mistakes to avoid
- Depreciating an asset below its salvage value — the straight-line formula stops accumulating depreciation once book value equals salvage value; continuing to apply the annual charge beyond that point overstates accumulated depreciation.
- Using acquisition cost instead of depreciable base — the formula's numerator is (Cost - Salvage Value), not Cost alone; omitting salvage value inflates annual depreciation and makes the asset reach zero book value before its useful life ends.
- Confusing accumulated depreciation with the current year's depreciation expense — accumulated depreciation is a running total on the balance sheet; the annual charge is a single-year income statement item.
Key terms
- Accumulated Depreciation
- The cumulative sum of all depreciation charges recorded against a fixed asset since it was placed in service.
- Straight-Line Depreciation
- A method that allocates an equal amount of depreciation to each year of an asset's useful life.
- Salvage Value
- The estimated residual value of an asset at the end of its useful life; also called residual or scrap value.
- Book Value
- The net value of an asset on the balance sheet, equal to its original cost minus accumulated depreciation.
- Useful Life
- The estimated period over which an asset is expected to provide economic benefits to the business.
Frequently asked questions
- Does the calculator handle partial-year depreciation in the first year?
- The standard formula gives full-year depreciation for each year t. For a mid-year purchase, multiply the annual charge by the fraction of the year the asset was in service (e.g. 6/12 for a July purchase). Then reduce year t by the first-year fraction accordingly.
- Why might the book value differ from the asset's market value?
- Straight-line depreciation allocates cost evenly over the useful life as an accounting convention. Market value reflects supply, demand, and condition. Some assets (land, art, certain equipment) appreciate while their book value is written down to zero.
- Can accumulated depreciation ever decrease?
- Yes -- if an asset is revalued upward under IFRS (revaluation model), some or all accumulated depreciation can be reset. Under US GAAP, only impairment write-downs are permitted; upward revaluation is not allowed.