Use this calculator to calculate the simple straight line depreciation of assets.
- Asset Cost
- the original value of your asset or the depreciable cost; the necessary amount expended to get an asset ready for its intended use
- Salvage Value
- the value of the asset at the end of its useful life; also known as residual value or scrap value
- Useful Life
- the expected time that the asset will be productive for its expected purpose
- Placed in Service
- select the month and enter the year the asset started being used for its intended purpose
- enter 1 or 4 digits; enter a four digit year to use your actual years OR enter a 1 to list years using digits 1 through the last year
- choose Full-Month, Mid-Month, Mid-Year or Mid-Quarter Convention; if you don't know, keep it at the common Full-Month
Cost: $11,000.00, Salvage: $1,000.00, Life: 5 years
Convention: Full-Month, First Year: 8 months
Straight-Line Depreciation Formula
The straight line calculation, as the name suggests, is a straight line drop in asset value. The depreciation of an asset is spread evenly across the life.
- Depreciation in Any Period = ((Cost - Salvage) / Life)
- Partial year depreciation, when the first year has M months is taken as:
- First year depreciation = (M / 12) * ((Cost - Salvage) / Life)
- Last year depreciation = ((12 - M) / 12) * ((Cost - Salvage) / Life)
- And, a life, for example, of 7 years will be depreciated across 8 years.
Straight-Line Depreciation Example
Suppose an asset for a business cost $11,000, will have a life of 5 years and a salvage value of $1,000.
- Depreciation in Any 12 month Period = (($11,000 - $1,000) / 5 years) = $10,000 / 5 years = $2,000/ year.
Microsoft® Excel® Functions Equivalent: SLN
The Excel equivalent function for Straight-Line Method is SLN(cost,salvage,life) will calculate the depreciation expense for any period. For a more accelerated depreciation method see, for example, our Double Declining Balance Method Depreciation Calculator.
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