Straight Line Depreciation Calculator

Depreciation is the reduction in the value of an asset over time due to wear, usage, or obsolescence. The Straight Line Depreciation Method is one of the simplest and most commonly used ways to calculate asset depreciation. This method spreads the cost of an asset evenly across its useful life.

What Is Straight Line Depreciation?

Straight-line depreciation calculates the same depreciation expense every year over the useful life of an asset. It's suitable for assets that wear out evenly over time, such as buildings, furniture, or computers.

Straight Line Depreciation Formula

$\text{Annual Depreciation}=\frac{\text{Initial Value}-\text{Salvage Value}}{\text{Useful Life}}$

To find the depreciated value after a number of years:

$\text{Depreciated Value}=\text{Initial Value}-(\text{Annual Depreciation}\times \text{Years Passed})$

Example Calculation

Let’s say you purchase a computer for $2,200, and you expect to use it for 5 years. After that, you estimate it can be sold for $200.

Step 1: Calculate Annual Depreciation

$\text{Annual Depreciation}=\frac{2200-200}{5}=\frac{2000}{5}=400$

So, the computer depreciates $400 each year.

Step 2: Calculate Depreciated Value After 3 Years

$\text{Depreciated Value}=2200-(400\times 3)=2200-1200=1000$

After 3 years, your computer is worth $1,000 based on straight-line depreciation.

When to Use Straight Line Depreciation

• When assets lose value consistently over time
• For budgeting and financial reporting
• When simplicity and predictability are preferred

Conclusion

Straight-line depreciation is a straightforward and widely accepted method to account for asset depreciation. With just three inputs—initial cost, salvage value, and useful life—you can calculate how much value an asset loses each year. Use our Straight Line Depreciation Calculator to save time and make informed decisions for your personal or business finances.