Straight-line depreciation: Spreading Asset Cost with Straight-Line Depreciation
Straight-line depreciation allocates depreciable cost evenly across the chosen useful life. Subtract the expected salvage value before dividing.
Use the Straight-line depreciation Calculator to enter your own figures and compare the result with the worked example below.
Straight-line depreciation formula
Annual depreciation = (Cost − Salvage value) ÷ Useful life
Worked example
| Item | Example value |
|---|---|
| Cost | 10000 USD |
| Salvage value | 1000 USD |
| Useful life | 5 years |
| Straight-line depreciation | 1,800 USD |
These are illustrative inputs, not current prices, rates or recommended targets. Where a currency is shown, keep all comparable money amounts in the same currency; conversion examples identify the two sides separately.
How to interpret the result
This is an accounting allocation, not a forecast of resale value. Tax depreciation rules and partial-year conventions may differ.
Related calculations
Method and further reading
The example follows the FinMathly calculator method. For broader background, see SEC: Understanding financial statements. The background resource may use jurisdiction-specific terms; it does not replace the assumptions of this calculator.
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