Finance Tool

Asset Depreciation Calculator

Calculate straight-line prime cost and diminishing value asset write-offs.

Last reviewed by the myCalculator Editorial Team

This calculator uses Australian rules and Australian data sources. Results may not apply outside Australia.

Input Parameters

Calculation Results

Final Salvage / Book Value
$3,000
Total Depreciation Expense
$22,000
Year 1 Annual Depreciation
$4,400

Visual Growth Breakdown

Formula & How Asset Depreciation Calculator Works

Mathematical Formula
Straight Line = (Cost - Salvage) / Life

Depreciation spreads the cost of an asset over its useful life. Straight line deducts the same amount each year: (cost − salvage value) ÷ life. A $40,000 vehicle with a $10,000 salvage value over 5 years loses $6,000 a year. Diminishing value applies a fixed percentage to the remaining balance, so the deduction is largest in year one. The ATO's diminishing value rate is 2 ÷ effective life, which is 40% for a 5-year life, so year one is $16,000 on the full cost. Use the method and effective life that match the asset's tax rules, and confirm the details with your accountant.

How to Calculate Asset Depreciation Calculator (Step-by-Step)
  1. Enter Asset Purchase Cost ($): Input your target parameter value.
  2. Enter Estimated Salvage Value ($): Input your target parameter value.
  3. Enter Effective Useful Life (Years): Input your target parameter value.
  4. Enter Depreciation Method: Input your target parameter value.
  5. Apply Formula: Calculate using Straight Line = (Cost - Salvage) / Life.
  6. Review Results: View exact computed answers, metrics, and worked mathematical proofs.
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Frequently Asked Questions (FAQs)

Which method gives higher tax deduction in Year 1?

Diminishing value method yields higher initial write-offs.

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Official Regulatory & Government Data Sources

Authoritative Standards & Verified Reference Citations

Independent & Verified

Calculations and mathematical logic on this page are grounded in published statutory rules, regulatory standards, and official government data published by the following bodies:

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