Cost Calculator AI
Manufacturing & IndustrialDepreciation

Equipment Depreciation Calculator

Calculate manufacturing equipment depreciation schedules using Straight-Line, Double-Declining Balance, or Units-of-Production accounting methods.

Asset Cost, Salvage Value & Service Life

Annual Depreciation
—
Straight-line GAAP
Monthly Expense
—
monthly allocation
Depreciable Base
—
Cost - Salvage
Hourly Write-Off (2k hrs)
—
rate per spindle hr

Straight-Line Depreciation Formula

Annual Depreciation = (Asset Purchase Cost - Salvage Value) ÷ Useful Life in Years
  • Depreciable Base: Purchase price minus expected residual salvage or resale value.
  • Straight-Line: Constant annual deduction spread evenly over useful life.
  • Double-Declining Balance: Accelerated front-loaded depreciation at 2× the straight-line rate.
  • Units of Production: Depreciation based on actual machine parts or cycles produced.

Step-by-Step Worked Example

Scenario: Depreciating a $100,000 CNC milling machine over 5 years with $10,000 salvage value

Calculation Steps:

  1. Depreciable Base = $100,000 - $10,000 = $90,000
  2. Annual Depreciation = $90,000 / 5 = $18,000 / year
  3. Year 1 Ending Book Value = $100,000 - $18,000 = $82,000
  4. Year 5 Ending Book Value = Salvage Value ($10,000)
Result: Annual depreciation expense is $18,000 per year, reducing book value to the $10,000 salvage value after 5 years.

How to Use This Calculator

  1. 1Enter total acquisition cost including freight, rigging, and installation.
  2. 2Input estimated salvage value at the end of equipment life.
  3. 3Select useful life in years and preferred depreciation method.

Assumptions & Limitations

  • For planning and managerial accounting estimates; consult a certified CPA for IRS tax depreciation (e.g. Section 179 or MACRS).
  • Asset cannot depreciate below salvage value.

Frequently Asked Questions

Which depreciation method is best for industrial equipment?

Straight-line is standard for GAAP financial reporting. Double-declining balance reflects faster technological obsolescence. Units-of-production matches wear-and-tear directly with production volume.

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