Depreciation Schedule Calculator

Understanding how an asset loses value year by year

When people talk about depreciation, they usually mean one simple idea: things you buy don’t stay worth the same forever. Buildings age, equipment wears out, and even well-maintained property slowly loses its accounting value over time.

The real confusion starts when someone asks, “How much value is lost each year?” That’s where most people get stuck — especially when taxes, accounting records, or long-term planning are involved.

This page is meant to help you understand that year-by-year loss clearly, not just calculate a number. Even if you never used the calculator above, the explanation here should still make sense and help you make better decisions.

Why people actually need a year-wise depreciation breakdown

In real life, depreciation is rarely about curiosity. It shows up when money decisions matter.

Property owners often need to know how much value they can claim as an expense each year. Business owners need to maintain proper records. Investors want to understand how depreciation affects long-term returns. Accountants need clean, auditable schedules.

A single “total depreciation” number is not enough in these situations. What matters is the path — how the value changes from one year to the next.

• Tax filings usually require year-by-year depreciation amounts
• Financial statements track opening and closing values annually
• Loan assessments often look at remaining book value
• Asset planning depends on knowing when value reaches a minimum

What this calculation actually tells you

This calculation does not predict market value. It does not tell you what someone would pay for your property tomorrow.

Instead, it answers a more specific accounting question:

“Based on a fixed useful life, how much value is allocated as depreciation each year, and what value remains after each year?”

The output is a schedule — a simple timeline showing how the asset’s book value moves over time. Each row represents one year of ownership.

How the logic works (plain English)

The calculator uses a straight-line approach, which is the most common and widely accepted method for property and asset depreciation.

Here’s the logic without any complicated formulas:

• Start with the original cost of the asset
• Decide how much value will remain at the end (salvage value)
• Decide over how many years the asset will be used
• Spread the value loss evenly across those years

Each year shows:

• The value at the start of the year
• The portion of value assigned as depreciation
• The value left at the end of the year

Nothing more, nothing hidden.

A realistic example with actual numbers

Imagine you purchase a property for 100,000. You expect that after its useful life, it will still be worth 10,000.

You decide to depreciate it over 5 years.

That means 90,000 of value is spread evenly across 5 years.

Each year:

• Opening value starts at the previous year’s closing value
• Depreciation is the same amount every year
• Closing value gradually approaches the salvage value

By the final year, the remaining value equals the salvage value — not zero.

How to read the schedule correctly

Many users look at the table and focus only on the depreciation column. That’s a mistake.

The real insight comes from seeing all three values together.

• Opening value shows how much value you are carrying into the year
• Depreciation shows how much value is expensed for that year
• Closing value shows what remains on the books

If you’re using this for taxes, the depreciation amount matters most. If you’re using it for planning or reporting, the closing value is often more important.

Common mistakes people make

Depreciation is simple in theory, but people often get it wrong in practice.

• Confusing depreciation with market price changes
• Setting salvage value to zero without thinking
• Using unrealistic useful life numbers
• Expecting depreciation to reflect actual wear perfectly
• Mixing tax depreciation rules with accounting estimates

This calculator avoids complexity, but it assumes you provide sensible inputs.

Important assumptions you should understand

Every calculation rests on assumptions. Ignoring them leads to wrong decisions.

This calculator assumes:

• Value decreases evenly every year
• No major renovations or improvements are added
• The asset is used consistently over time
• Salvage value is known and fixed

Real life can be messier than this. That’s not a flaw — it’s the nature of simplified models.

When this calculator should NOT be used

There are situations where a straight-line schedule is not appropriate.

• If tax law mandates a specific accelerated method
• If asset usage varies heavily year to year
• If depreciation depends on output or usage
• If market valuation is your primary concern

In those cases, a more specialized calculation or professional advice is required.

Accuracy, limits, and trust

This calculator is designed to be accurate within its assumptions. It does not guess, forecast, or manipulate outcomes.

It does not:

• Adjust for inflation
• Account for tax law differences by country
• Include maintenance, upgrades, or revaluation
• Replace professional accounting judgment

What it does provide is clarity — a clean, logical view of how depreciation unfolds over time.

Why a schedule matters more than a single number

A single depreciation figure answers a momentary question.

A schedule answers a planning question.

Seeing the full timeline helps you anticipate future values, understand past records, and make informed decisions without surprises.

That’s the real purpose of this calculation — not complexity, but understanding.