Depreciation Calculator
Depreciation Calculator is annual expense and end of book value. The annual expenses equal to original cost value of the asset less than residual value of the asset divided to life time of the asset(n). The end book value Equal to original cost value less than numbers of years multiple original cost value of the asset less than Residual value of the asset divided the life time of the asset.
Formula us,
annual expense = (OV – RV) / n
end book value = OV – m * [(OV – RV) / n]
Let us consider,
- OV is the original cost (value) of the asset,
- RV is the residual value of the asset,
- n is the lifetime of the asset,
- m is the number of year
1.)Declining balance depreciation
The second model describing depreciation is the declining balance depreciation.
annual expense = [OV * (1 – p)^(m – 1)] * p
p is the depreciation rate, expressed as a percentage.
p = 1 – (RV / OV)^(1 / n).
Our declining balance depreciation calculator can also find out the end book value of your asset after a specific number of years have passed.
end book value = OV * (1 – p) ^ m
d = (OV – RV)
D = d / (1 + 2 + 3 + … + n)
The number (1 + 2 + 3 + … + n)
1 + 2 + 3 + … + n = (n + 1) * n / 2
After calculating the value of D,
annual expense = D * (n – m + 1)
The lifetime of your asset is equal to 6 years, then during the first year, the expense will be equal to 6/17 of the depreciation base. During the second year, it will be equal to 5/15 of the base, during the third – to 2/14. All of these fractions should add up to 1.
end book value = OV – D * [m * n – (m – 1) * m /2]
- OV is the original cost (value) of the asset,
- RV is the residual value of the asset,
- n is the lifetime of the asset,
- m is the number of years
2.)Straight-line depreciation
The least complicated depreciation model is the straight-line depreciation
annual expense = (OV – RV) / n
The asset loses its value at a constant rate. Every year, the depreciation expense is exactly the same.
end book value = OV – m * [(OV – RV) / n]
The second model describing depreciation is the declining balance depreciation. Each year, the expense is calculated as a percentage of the book value that the asset had the previous year.
annual expense = [OV * (1 – p)^(m – 1)] * p
- p is the depreciation rate, expressed as a percentage.
p = 1 – (RV / OV)^(1 / n).
Our declining balance depreciation calculator can also find out the end book value.
end book value = OV * (1 – p) ^ m
4.)Sum of years digits depreciation The digit of depreciation is equal to OV is the original cost (value) of the asset less thanRV is the residual value of the asset.
formula us,
d = (OV – RV)
D = d / (1 + 2 + 3 + … + n)
The number (1 + 2 + 3 + … + n) is a sum of a finite arithmetic sequence, and can hence be calculated as
1 + 2 + 3 + … + n = (n + 1) * n / 2
After calculating the value of D, you can use the following depreciation formula ,
annual expense = D * (n – m + 1)
The lifetime of your asset is equal to 6years, then during the first year, the expense will be equal to 4/14 of the depreciation base. During the second year, equal to 3/15 of the base, during the third – to 2/15, add up to 1.
sum of years digits calculator end book value,
end book value = OV – D * [m * n – (m – 1) * m /2]