📉Accumulated Depreciation Calculator
Calculate accumulated depreciation for assets using straight-line, declining balance, or sum-of-years digits methods
Last updated: November 7, 2025
Are you an accountant looking to calculate the accumulated depreciated value of the company's vehicle? Or is it the machine used to manufacture the toys that you wish to find the total depreciated value of? This calculator will help you find the total depreciated value in real-time.
For those who may be new to the field of accounting and finance, we will also cover:
- What accumulated depreciation is
- How to use our accumulated depreciation calculator
- Four different accumulated depreciation formulas
- How to calculate the accumulated depreciation using:
- The straight-line method
- The declining balance method
- The sum of the year's digits method
- The units of production method
What is Accumulated Depreciation Exactly?
Businesses have fixed assets that continue to be useful for many years. We capitalize such assets to match the expense of the asset to the total period it proves economically beneficial to the company. Accumulated depreciation refers to the total expense affixed to a fixed asset from the date it was put to use.
For instance, a taxi company may buy a new car for $10,000; however, at the end of year one, that car continues to be useful. The useful life of that car is also one year less than it was at the time of purchase.
In years two and three, the car continues to be useful and generates revenue for the company. Capitalizing this item reflects the initial expense as depreciation over the asset's useful life. In this way, this expense is reflected in smaller portions throughout the useful life of the car and weighed against the revenue it generates in each accounting period.
When we find the total of the depreciated expense of the asset after each year, the answer we arrive at is what is the accumulated depreciation of the asset.
If you are interested in learning more about depreciation, be sure to visit our depreciation calculator. Additionally, if you are interested in learning what revenue is and how to calculate it, visit our revenue calculator.
How to Calculate the Accumulated Depreciation
To calculate the accumulated depreciation, we can use any of the following methods:
- Straight line
- Declining balance
- Sum of the year's digits
- Units of production
Let's say Company X bought a toy-producing machine for $25,000. The estimated life of the machine is 15 years, and its salvage value is $3,000. The depreciation rate is 10%.
Here is how to calculate the accumulated depreciation using each of the methods mentioned above.
How to Calculate the Accumulated Depreciation: The Straight-Line Method
Accumulated depreciation = ((Cost of the asset - Salvage value) ÷ Life of the asset) × Number of years
Let's assume that, in this instance, we wish to calculate the accumulated depreciation after 3 years.
Here is how to calculate the accumulated depreciation using the straight-line method:
- Subtract the salvage value from the cost of the asset: 25,000 - 3,000 = 22,000
- Divide the value in step 1 by the life of the asset: 22,000 ÷ 15 = 1,466.667
- Multiply the answer in step 2 by the number of years: 1,466.667 × 3 = $4,400.00
So the accumulated depreciated value of the truck after three years is $4,400.00.
The original cost of an asset minus its accumulated depreciation is the current book value of the asset. This means that after three years, the book value of the toy-producing machine is: 25,000 - 4,400.00 = $20,600.
The Declining Balance Method
The formula for the declining balance method of accumulated depreciation (AD) is:
AD = (Current book value × Depreciation rate) + Sum of the previous years' depreciation
So, using the problem statement above, the calculation for the depreciation expense for the first year would look like this:
D = 25,000 × 10% = 25,000 × 0.1 = $2,500
For the second year, the book value would now be: 25,000 - 2,500 = $22,500
So, in the second year, the depreciation expense would be calculated on this new (present) book value of $22,500.
So the depreciation expense in year 2 would be: 22,500 × 10% = $2,250
Now, after 2 years, the accumulated depreciation would be the sum of the depreciation expense from years 1 and 2: 2,500 + 2,250 = $4,750
The Sum of the Year's Digits Method
The formula for calculating the accumulated depreciation using the sum of the year's digits method is:
(Remaining life span ÷ SYS × (Cost of the asset - Salvage value)) + Sum of the previous years' depreciation
where SYS is the sum of the year's digits.
So since the life of the toy-producing machine above is 15 years, we will add together the digits representing the number of years of the life of the assets:
SYS = 1 + 2 + 3 + 4 + 5 + 6 + 7 + 8 + 9 + 10 + 11 + 12 + 13 + 14 + 15 = 120
So substituting the given values into the formula plus the calculated SYS, for the first year, we have a depreciated expense (DE):
DE = 15 ÷ 120 × (25,000 - 3,000) = 15 ÷ 120 × 22,000 = $2,750
In year 2, the depreciated expense will look like this:
DE = 14 ÷ 120 × (25,000 - 3,000) = $2,566.67
So to find the accumulated depreciation AD, we need to sum the total depreciation expense from each year: AD = 2,750 + 2,566.67 = $5,316.67
The Units of Production Method
When we calculate the accumulated depreciation using the units of production method, we use the following formula:
DE = (Asset cost - Salvage value) ÷ Estimated units over lifespan × Actual units produced
Let's assume that the expected number of units the toy machine can produce over its life span is 75,000. In year 1, it made 700 units, and in year 2, it produced 10,000 units.
So for company X, our depreciation expense in year 1 would be:
DE = (25,000 - 3,000) ÷ 75,000 × 700 = $205.33
In year 2, the depreciation expense would be:
DE = (25,000 - 3,000) ÷ 75,000 × 10,000 = $2,933.33
So to find the accumulated depreciation after two years, we add the depreciation expense from years 1 and 2: 205.33 + 2,933.33 = $3,138.67
How to Use Our Accumulated Depreciation Calculator
Our accumulated depreciation calculator is pretty straightforward to use:
- Choose the accumulated depreciation method you require (Straight-Line, Declining Balance, or Sum-of-Years Digits).
- Enter the Asset Cost: The original purchase cost of the asset.
- Enter the Salvage Value: The estimated value of the asset at the end of its useful life.
- Enter the Useful Life: The expected useful life of the asset in years.
- Enter the Years in Service: The number of years the asset has been in service.
- If using the Declining Balance method, enter the Declining Balance Rate (typically 200% for double declining or 150% for 1.5x declining).
The accumulated depreciation for the time period will be displayed, along with the annual depreciation, book value, remaining depreciation, and depreciation percentage.
Current book value refers to the net value of an asset at the start of the accounting period. Are you interested in other calculators like this one? Check out our business budget and financial leverage ratio calculators.
What Type of Assets Do We Calculate Accumulated Depreciation For?
We calculate accumulated depreciation on fixed assets that outgrow their usefulness over time. Some assets to which accumulated depreciation may apply are:
- Vehicles
- Machinery
- Tools
- Buildings
Does accumulated depreciation apply to land? No. Although land is a fixed asset, accumulated depreciation does not apply to it. This is because land is an asset that does not outgrow its usefulness over time.
Frequently Asked Questions
Accumulated Depreciation is the total amount of depreciation expense that has been recorded for an asset since it was acquired. It represents the reduction in the asset's value over time due to wear, tear, and obsolescence. It is a contra-asset account that reduces the asset's book value on the balance sheet.
Straight-line depreciation allocates the same amount of depreciation expense each year over the asset's useful life. The formula is: Annual Depreciation = (Asset Cost - Salvage Value) / Useful Life. This is the simplest and most commonly used depreciation method.
Declining balance depreciation applies a fixed percentage rate to the asset's book value each year, resulting in higher depreciation in early years and lower depreciation in later years. Common rates are 200% (double declining balance) or 150% (1.5x declining balance). The depreciation amount decreases each year as the book value decreases.
Sum-of-years digits depreciation allocates more depreciation to earlier years and less to later years. It uses a fraction based on the remaining useful life divided by the sum of the years' digits. For example, for a 5-year asset, the sum is 15 (5+4+3+2+1), and year 1 gets 5/15 of the depreciable amount.
Book Value (also called carrying value) is the asset's original cost minus its accumulated depreciation. It represents the asset's value as shown on the balance sheet. Book Value = Asset Cost - Accumulated Depreciation. The book value cannot go below the salvage value.
Salvage Value (also called residual value or scrap value) is the estimated value of an asset at the end of its useful life. It represents the amount the asset can be sold for or its scrap value. The asset cannot be depreciated below its salvage value.
The choice depends on your accounting standards, tax requirements, and business needs. Straight-line is simple and provides consistent expenses. Declining balance and sum-of-years digits provide higher expenses in early years, which may better match the asset's actual usage pattern. Consult with an accountant or tax professional for guidance.