Depreciation Methods

This depreciation calculator supports straight-line, double-declining balance, and 150% declining balance. Straight-line: (Cost − Salvage) ÷ Life. Declining balance: Book Value × (rate ÷ Life), never falling below salvage — accelerated write-offs that match how assets actually lose value.

Choosing a Method

Straight-line suits buildings and stable assets. DDB suits vehicles, electronics, and machinery with heavy early-year value loss. The 150% method is a gentler accelerated option. On financial statements, match the method to the asset's benefit pattern; for tax, follow the mandated system in your jurisdiction.

Depreciation and Cash Flow

Depreciation is a non-cash expense — it reduces taxable income without spending cash. It is added back when computing operating cash flow and EBITDA. Higher depreciation in early years defers tax, improving short-term cash flow at the cost of higher taxable income later.