What is the formula for straight-line depreciation?

Annual Depreciation = (Cost minus Salvage Value) / Useful Life in Years. A $50,000 machine with $5,000 salvage over 10 years: ($50,000 minus $5,000) / 10 = $4,500/year.

When should I use straight-line vs accelerated depreciation?

Straight-line is standard for GAAP financial reporting. For taxes, MACRS or Section 179/bonus depreciation accelerates deductions, which is usually more beneficial for cash flow.

Does salvage value matter for MACRS?

No. MACRS (used for US taxes) ignores salvage value and depreciates the full cost over a set recovery period with prescribed rates. Salvage value only applies to straight-line for financial reporting.

Straight-Line Depreciation Calculator

Calculate annual depreciation using the straight-line method: (Cost minus Salvage Value) / Useful Life. Simplest and most commonly used method for financial reporting.

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Straight-Line Depreciation Calculator

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Frequently Asked Questions

What is the formula for straight-line depreciation?

When should I use straight-line vs accelerated depreciation?

Does salvage value matter for MACRS?