Understanding the depreciation calculator
Depreciation spreads the cost of a long-lived asset across the years it's used, matching the expense to the revenue it helps produce. The straight-line method deducts an equal amount each year simple and common for financial reporting. The double-declining-balance method front-loads the deduction, writing off more early on, which better reflects assets that lose value fastest when new.
Both methods stop at the salvage value, the estimated worth at the end of the asset's useful life, and both deduct the same total over time they only differ in timing. Businesses often prefer accelerated methods for tax purposes because larger early deductions defer taxes, improving near-term cash flow. Tax rules like MACRS prescribe specific schedules, so consult those for filing rather than relying on a general estimate.
Results are estimates for education only and are not financial advice.