Depreciation Calculator
Enter the asset cost and effective life, choose straight line or diminishing value, and get a year-by-year depreciation schedule.
Enter the asset cost and effective life, choose straight line or diminishing value, and get a year-by-year depreciation schedule.
Every formula used by these calculators. They match the FNSACC323 Perform financial calculations unit.
Markup calculates profit as a percentage of the cost price. Profit Margin calculates profit as a percentage of the selling price.
Fixed Costs stay the same no matter how much you sell (e.g. rent, insurance). Variable Cost is what it costs to make or deliver one single unit (materials, packaging, per-item shipping) — it goes up and down with sales, unlike fixed costs. Selling Price is what you charge per unit.
The same amount is written off every year. This is also called the prime cost method.
Example. A machine costs $11,000, is expected to be worth $1,000 at the end, and has an effective life of 5 years.
Depreciation = ($11,000 − $1,000) ÷ 5 = $2,000 a year.
The rate is applied to what is left of the asset’s value each year, so the deductions are larger at the start and shrink over time.
Example. The same $11,000 machine over 5 years has a rate of 200% ÷ 5 = 40%.
Year 1: $11,000 × 40% = $4,400. Year 2: $6,600 × 40% = $2,640. Year 3: $3,960 × 40% = $1,584.
Diminishing value suits assets that lose most of their value early, such as vehicles and computers. Straight line suits assets that wear evenly. This calculator works in whole years; for tax, the ATO formulas also pro-rate by days held in the first year. The two methods are compared in Straight line vs diminishing value depreciation.
200% divided by the asset’s effective life in years. An asset with a 5 year life has a 40% rate.
How long an asset can be used to produce income. The ATO publishes effective life estimates for common assets, or you can work out your own.
The amount you expect the asset to be worth at the end of its useful life. It is left out of the amount depreciated under the straight line method.