Last updated: March 2, 2026 by Emily Taylor

How to Calculate Depreciation

Formula

Annual Depreciation = (Cost - Salvage Value) / Useful Life.

Straight-line depreciation spreads the cost of an asset evenly over its useful life.

Depreciation reduces taxable income and reflects the declining value of business assets.

Common use cases:

  • Tax deduction planning
  • Asset management
  • Financial statement preparation

Frequently Asked Questions

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Emily Taylor

Certified Public Accountant, CPA, MBA

Emily is a Certified Public Accountant with an MBA in Finance. She has over 10 years of experience in tax planning, business accounting, and personal finance advisory. She develops practical financial tools for everyday money management.

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