What is depreciation?

Depreciation is the accounting process of allocating the cost of tangible assets over their useful lives. It represents how much of an asset's value has been used up over time.

What are the main depreciation methods?

The three main methods are: 1) Straight-line (equal amounts each year), 2) Declining balance (accelerated depreciation), and 3) Units of production (based on usage).

Why is depreciation important?

Depreciation affects financial statements and tax liabilities. It helps businesses accurately report asset values, spread costs over useful life, and reduce taxable income.

Depreciation Calculator | ClayDesk Business Tools

Asset Cost ($)

Salvage Value ($)

Useful Life (years)

Depreciation Method

Depreciation Schedule

Year	Beginning Value	Depreciation	Ending Value

Interpretation:

Your depreciation schedule shows how your asset's value decreases over time, affecting both your balance sheet and taxable income.

Depreciation Formulas

Straight-line Method :

(Asset Cost - Salvage Value) / Useful Life

Equal depreciation expense each year

Declining Balance:

Book Value × (1 / Useful Life) × Rate

Higher depreciation in early years

Double Declining Balance:

Book Value × (2 / Useful Life)

Most accelerated depreciation method

Why Depreciation Matters for SEO:

"Depreciation Calculator" is a highly searched term because:

Business owners need to calculate tax deductions
Accountants require accurate financial reporting
Investors analyze company asset management
Tax rules change frequently (bonus depreciation, Section 179)

Key Insights:

Tax Benefits

Depreciation reduces taxable income, lowering tax liability

Cash Flow

Non-cash expense that improves operating cash flow

Depreciation Calculator