Linear Depreciation Calculator (Straight-Line Method)

In the world of small business accounting and financial planning, simplicity often trumps complexity. The Straight-Line Depreciation method is the gold standard for this approach, offering a consistent and predictable way to expense an asset over its useful life. Unlike accelerated methods that front-load expenses to reduce tax liabilities early on, the straight-line method spreads the cost evenly, making it the preferred choice for internal bookkeeping, financial reporting to investors who prefer stable earnings, and businesses with assets that wear out uniformly over time.

Accuracy in this calculation is vital for maintaining a healthy balance sheet. Overestimating depreciation can artificially deflate your profits, potentially scaring off investors, while underestimating it can lead to inflated tax bills or sudden write-offs when the asset eventually fails. This tool eliminates the manual error often found in spreadsheet formulas, providing an instant, standardized calculation based on the three core pillars: Cost Basis, Salvage Value, and Useful Life.

The Straight-Line method uses a constant rate of depreciation. The formula calculates how much of the asset's value is used up each year:

Where:

• Cost is the initial purchase price plus setup fees.
• Salvage is the estimated resale value at the end of its life.
• Life is the number of years the asset is expected to be useful.