Annual expense and remaining book value
The selected-year expense reduces opening book value to closing book value. Accumulated depreciation is the amount allocated since acquisition, not cash held in a reserve. The schedule stops at the entered residual value.
To examine how long project cash inflows take to recover an initial outlay, use the Payback Period Calculator .
The formula
The declining method chooses the larger of its declining and remaining straight-line candidates, capped at the amount above residual value. The final year allocates any remaining depreciable amount. Full years are used; calculations retain unrounded amounts and displayed currency rounds to two decimals.
Worked example
An asset costing 10,000 with residual value 1,000 and useful life 5 years has straight-line expense 1,800 per year. Year 1 closes at 8,200. With double declining, first-year expense is 4,000 and closing value is 6,000.
How to use this calculator
- Enter asset cost and a residual value no greater than cost.
- Choose useful life in whole years and a year within that life to inspect.
- Compare the annual table and book-value chart for the selected method.
Expense allocation versus resale value
Depreciation allocates an asset’s recorded cost over its useful life. A book value is an accounting amount and need not equal a market price or replacement cost. The residual input is an estimate chosen for the calculation, rather than a forecast made by the tool. Changing that estimate changes the total cost allocated.
The declining method’s switch
Double declining applies twice the straight-line rate to opening book value, which tends to concentrate expense early. When straight-line allocation over the remaining years becomes larger, this implementation switches to that amount. It never writes below the residual floor. This convention should be compared with the accounting method used in your own records.
Full-year assumptions
The schedule begins with year 1 and excludes partial acquisition years, disposal dates, impairment, revaluation, tax depreciation systems, and changing estimates. Published rows round independently to cents, so adding the displayed rows can differ slightly from the unrounded total. Use the underlying accounting policy for formal reporting rather than treating a planning schedule as a jurisdiction-specific rule.
Assumptions & limitations
What this calculation assumes
- Cost and residual value share one currency; annual depreciation begins with a full year.
What to keep in mind
- No MACRS, tax deduction, half-year convention, impairment, or mid-life policy changes.
Common questions
Why can book value remain above zero?
Residual value is the estimated amount left at the end of useful life. Only cost above that value is depreciated.
What if residual value equals cost?
The depreciable amount and all annual expenses are zero; book value remains equal to cost.