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Straight-Line Depreciation Calculator

Calculate straight-line depreciation with annual and monthly amounts, plus a complete year-by-year schedule showing book value.

$

Original purchase price of the asset

$

Estimated value at end of useful life

years

Expected number of years of use

Enter asset details, then click Calculate to see your depreciation schedule.

How Straight-Line Depreciation Works

The Straight-Line Method

Straight-line depreciation is the most straightforward way to account for the loss in value of an asset over time. It allocates an equal amount of depreciation expense to each year of the asset’s useful life.

The Formula

The calculation requires three inputs:

  • Asset Cost: The original purchase price or cost basis
  • Salvage Value: The estimated value at the end of the asset’s useful life
  • Useful Life: The number of years the asset will be used

Annual Depreciation = (Asset Cost − Salvage Value) ÷ Useful Life

Monthly Depreciation = Annual Depreciation ÷ 12

Example

A company buys office furniture for $12,000. They estimate a salvage value of $2,000 after 10 years of use.

  • Depreciable amount: $12,000 − $2,000 = $10,000
  • Annual depreciation: $10,000 ÷ 10 = $1,000 per year
  • Monthly depreciation: $1,000 ÷ 12 = $83.33 per month

After 10 years, the furniture’s book value equals its salvage value of $2,000.

When to Use Straight-Line

Straight-line is best when an asset provides roughly equal benefit each year — such as furniture, buildings, or leasehold improvements. For assets that lose value faster early on (like vehicles or technology), accelerated methods like MACRS may better reflect reality and provide larger early tax deductions.

Frequently asked questions

Straight-line depreciation is the simplest and most commonly used method of depreciation. It spreads the cost of an asset evenly over its useful life. Each year, the same dollar amount is deducted as a depreciation expense. It’s widely used for financial reporting under GAAP.

Salvage value (or residual value) is the estimated amount the asset will be worth at the end of its useful life. Research resale values for similar used assets, consult manufacturer guidelines, or estimate based on scrap value. If uncertain, many businesses use $0 or a conservative 5–10% of original cost.

Useful life is how long you expect to use the asset in your business. The IRS provides guidelines: computers and vehicles are typically 5 years, furniture and fixtures 7 years, buildings 27.5–39 years. For financial reporting, you can use your own reasonable estimate based on expected wear and obsolescence.

Annual Depreciation = (Asset Cost − Salvage Value) ÷ Useful Life in Years. For example, a $50,000 machine with $5,000 salvage value and 10-year life: ($50,000 − $5,000) ÷ 10 = $4,500 per year.

For US federal taxes, most tangible property must use MACRS depreciation, not straight-line. However, you can elect to use straight-line under MACRS with the same recovery periods. Straight-line is primarily used for financial (book) reporting under GAAP and IFRS.

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