How to use the straight-line vs declining balance calculator
Straight-line depreciation spreads the depreciable amount evenly across the useful life, while declining balance takes a percentage of the remaining book value each year and front-loads the expense. Enter the asset cost, salvage value, useful life and a declining balance factor to see both schedules side by side.
The factor converts the useful life into a rate: 2 over five years is 40% a year, the familiar double declining balance. The difference column subtracts the straight-line expense from the declining balance expense, so it turns negative in the later years once the front-loading reverses.
Declining balance never takes book value below salvage value, and the year the floor is reached is flagged in the table and in the totals. These are book figures. Tax depreciation in the US normally follows MACRS with its own tables and conventions, which this tool does not reproduce, and it does not apply partial-year conventions.
Frequently asked questions
Not directly. These are book depreciation methods used for financial statements. US federal tax depreciation normally follows MACRS, which assigns its own recovery period and percentage table to each asset class and applies conventions for the year an asset is placed in service. Use MACRS tables or your tax advisor for the return.
The factor turns the useful life into an annual rate: a factor of 2 over a five-year life gives 40% of the remaining book value each year, which is the double declining balance method. A factor of 1.5 gives 30%. The rate derived from your inputs is shown in the results.
Each year's expense is a percentage of what is left, so it shrinks as book value falls. Book value also cannot go below salvage value, so in the year the floor is reached the expense is trimmed to land exactly on salvage. The table flags that year.