How this calculator works
Accumulated depreciation is the total cost written off since the asset was bought, and net book value is the original cost less that total. Straight line spreads the depreciable amount evenly. Declining balance applies a fixed percentage to the opening book value each year, so early years carry more expense, and the book value stops at salvage. Sum of the year's digits gives each year a fraction based on its position in the useful life. Units of production charges a fixed amount per unit actually made, so this year's charge cannot be reported separately without a production record.
Formula
Straight line: annual charge = (cost - salvage) / life. Declining balance: book value after n years = max(salvage, cost × (1 - rate)^n). Sum of years: year k share = (life - k + 1) / (life × (life + 1) / 2). Units of production: charge = (cost - salvage) × units produced / estimated units. Accumulated depreciation = cost - net book value in every method.
Worked example
A $10,000 asset with a $1,000 salvage value and a five-year life gives $1,800 a year under straight line, so after three years the accumulated depreciation is $5,400 and the net book value is $4,600. At a 25% declining rate the book value after three years is $10,000 × 0.75³ = $4,218.75. Sum of the year's digits charges $3,000 in year one, $2,400 in year two and $1,800 in year three.
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Frequently asked questions
Which method should I use?
Straight line is the default when an asset benefits evenly over its life. Declining balance or sum of the year's digits suit equipment that loses value faster when new. Units of production suits machinery whose wear tracks output. Tax rules may require a particular method.
Can book value fall below salvage value?
No. The calculator stops accumulated depreciation at cost minus salvage, so the book value never drops below the salvage value you entered.
What happens after the useful life ends?
Under straight line and sum of the year's digits the asset is fully depreciated to salvage and later years add no charge. Under declining balance the book value simply remains at salvage.