What is accumulated depreciation?

Accumulated depreciation is the cumulative total of all depreciation expense recorded for an asset since it was placed in service. It is a contra-asset account on the balance sheet that offsets the asset's gross cost to show its current book value.

What is the straight-line depreciation method?

The straight-line method spreads the depreciable cost (asset cost minus salvage value) evenly over the useful life. Annual depreciation = (Cost - Salvage Value) / Useful Life. It is the simplest and most widely used method.

What is the declining balance method?

The declining balance method applies a fixed percentage rate to the remaining book value each year, resulting in higher depreciation in early years and lower charges later. The double-declining balance (DDB) uses twice the straight-line rate. The asset cannot be depreciated below its salvage value.

What is the sum-of-years-digits method?

The sum-of-years-digits (SYD) method is an accelerated approach that assigns a fraction of the depreciable cost each year. The fraction numerator is the remaining useful life at the start of the year; the denominator is the sum of all years' digits. For a 5-year asset, the denominator is 1+2+3+4+5 = 15.

What is the difference between depreciation and accumulated depreciation?

Depreciation expense is the portion of an asset's cost allocated to a single accounting period (e.g., one year). Accumulated depreciation is the running total of all depreciation expense recognized from acquisition to the current date. Depreciation is an income-statement item; accumulated depreciation is a balance-sheet contra-asset.

Can accumulated depreciation exceed the asset cost?

No. An asset cannot be depreciated below its salvage value (or below zero if salvage value is zero). The accumulated depreciation is capped at Cost minus Salvage Value. This calculator enforces that limit automatically.

Which depreciation method is best for tax purposes?

Accelerated methods (declining balance, sum-of-years-digits) generate larger deductions in earlier years, reducing taxable income sooner and improving cash flow. However, actual tax treatment depends on jurisdiction and asset class. Consult a tax professional for your specific situation.

How do you calculate accumulated depreciation?

Add up every period of depreciation expense recorded since the asset was placed in service. With straight-line, accumulated depreciation after N years = N × (Cost − Salvage Value) / Useful Life. For a $50,000 asset with a $5,000 salvage value and a 10-year life, annual depreciation is $4,500, so after 3 years accumulated depreciation is $13,500 and book value is $36,500.

Accumulated Depreciation Calculator

Name: Accumulated Depreciation Calculator
Availability: InStock
Author: Nham Vu

Enter asset cost, salvage value, and useful life to get a full depreciation schedule using straight-line, declining balance, or sum-of-years-digits methods.

Asset Details

Asset Cost ($)

Salvage Value ($)

Estimated residual value at end of useful life.

Useful Life (years)

Depreciation Method

Year-by-Year Depreciation Schedule

Year	Beginning BV	Depreciation	Accumulated	Ending BV

Enter asset details and click Calculate
to generate your depreciation schedule.

Summary

Enter asset cost, salvage value, and useful life to get a full depreciation schedule using straight-line, declining balance, or sum-of-years-digits methods.

How it works

Enter the asset cost (original purchase price) and salvage value (estimated residual value at end of life).
Set the useful life in years.
Choose a depreciation method: Straight-Line, Declining Balance, or Sum-of-Years-Digits.
For Declining Balance, optionally set the rate multiplier (e.g. 2 for double-declining).
Click Calculate to generate the full depreciation schedule.
Review the year-by-year table showing annual depreciation, accumulated depreciation, and ending book value.

Use cases

Prepare depreciation schedules for financial statement reporting under GAAP or IFRS.
Determine the current book value of equipment, machinery, or vehicles.
Compare accelerated vs. straight-line depreciation for tax planning purposes.
Calculate how much of an asset's cost has already been expensed.
Estimate the remaining value of a fixed asset for insurance or resale.
Model capital expenditure impact on earnings over multiple years.
Support audit preparation by verifying accumulated depreciation balances.
Teach accounting students the mechanics of the three main depreciation methods.

Frequently Asked Questions

Related tools

Book Value Calculator Amortization Calculator Break Even Calculator

Last updated: 2026-05-23 · Reviewed by Nham Vu