# Straight Line Depreciation Calculator

Depreciation is a business expense, it represents the reduction in value of a long term asset due to wear and tear.

There are various methods used to calculate the depreciation expense of which the simplest and most generally used is the straight line depreciation method. This calculator will perform the straight line depreciation calculation for you, and work out the annual depreciation expense and the implied depreciation rate.

The calculation is carried out using the straight line depreciation formula which takes the cost of the asset less any expected salvage (residual) value and divides this by the anticipated useful life of the asset. The formula for straight line depreciation is given as follows:

Straight Line Depreciation = (Cost – Salvage value) / Useful life

Full details of how the straight line depreciation method is used can be found in our depreciation tutorials. ## Using the Straight Line Depreciation Calculator

The Excel straight line depreciation calculator, available for download below, is used to compute straight line depreciation by entering details relating to the asset. The calculator is used as follows:

1. Enter the cost of the asset. The cost of the asset can be found in the long term asset account, asset register, or on the original source document (invoice) for the asset
2. Enter the salvage value. The salvage or residual value is the amount the asset is expected to be worth at the end of its useful life. The straight line depreciation calculator works out the cost which is subject to depreciation, known as the depreciable cost.
3. Enter the useful life. The useful life is the anticipated time in years which the asset is expected to be useful to the business. The straight line depreciation calculator works out the annual depreciation expense for the asset and the implied depreciation rate.