Accumulated Depreciation Calculator (Straight-Line)
Using the straight-line method, compute annual depreciation, accumulated depreciation to date and current book value.
Input Data
Results
At a glance:Accumulated depreciation is the total depreciation of a fixed asset from inception to date. Straight-line: annual depreciation = (cost - salvage value) / useful life; accumulated depreciation = annual depreciation x years elapsed; book value = cost - accumulated depreciation.
Formula
Annual depreciation = (asset cost − salvage value) / useful life.
Accumulated depreciation = annual depreciation × years elapsed.
Book value = asset cost − accumulated depreciation.
$$\\text{Annual depreciation} = \\dfrac{\\text{Asset cost} - \\text{Residual value}}{\\text{Useful life}}$$How to Use
- Enter the asset cost and its estimated salvage value.
- Enter the useful life and years elapsed.
- View annual depreciation, accumulated depreciation and current book value.
FAQ
What is the difference between accumulated and annual depreciation?
Annual depreciation is the charge for one year; accumulated depreciation is the sum of all years' charges to date. Under straight-line, annual is fixed and accumulated is annual x years elapsed. Book value = cost - accumulated depreciation.
What is salvage value, and can it be zero?
Salvage value is the estimated recoverable value at end of life (e.g. from disposal). It can be zero, meaning the whole cost is depreciated. Higher salvage means lower annual depreciation; as an estimate it affects the amount, so judge reasonably.
Is accounting depreciation the same as tax depreciation?
Not necessarily. This tool computes accounting straight-line depreciation. For tax, Hong Kong has specific depreciation allowance rules for fixed assets that may differ in method and rates. File tax per the Inland Revenue Department's rules; consult an accountant for complex cases.
How does straight-line differ from declining-balance?
Straight-line (used here) assumes even wear, fixed annual charge — simple and smooth, good for stable assets (buildings, furniture). Declining-balance charges a fixed rate on the reducing book value, front-loading depreciation — better for assets that lose value early (electronics, vehicles). Sum-of-years'-digits is another accelerated method. Total depreciable amount (cost - salvage) is the same; only the timing differs.
What if salvage value or life was estimated wrongly?
Both are estimates at inception that directly affect annual depreciation. If they prove materially off, accounting treats it as a change in estimate: from the change date, recompute future depreciation using the latest book value, remaining life and new salvage — without restating prior years. Estimates need not be perfect but should be reasonable and reviewed. Permanent impairment needs a separate impairment test.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.