Depreciation Calculators

This section contains dedicated calculators that are specifically designed for Depreciation Calculations. On this page we provide an overview of depreciation with more detailed information on the different depreciation types with a supporting depreciation calculator which can be used online to calculate the math using the relevant depreciation formula. Simply choose the relevant calculator according to your requirement to access:

  • Information and knowledge about the different uses of depreciation calculations with the help of supporting guides that are provided adjacent to the online calculators.
  • Free Calculators: iCalculator provides a range of calculators that compute depreciation expense for different assets, and yes, all the calculators are online and free to use.
  • Informative depreciation guides to provide you with the information on how to use these calculators and when and where to apply these calculations so you can take full advantage of them.

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Depreciation, When does it start?

Depreciation Calculators. This image shows a an individual considering the merits of an a long term asset purchase using the depreciation calculators provided by iCalculator.

Most people are aware that an asset loses its value over time. Let's take your car for an instance. You pay a premium price for a brand new car quite happily when you purchase it because it is brand new, the tyres, the body of the car, the engine everything is new, even the smell of a new car is unique.

All that money you invested in your new car will, as soon as you start driving it, even after a few seconds, has lost value. Quite simply, you will not be able to get the same amount back by selling this car as you expended on purchasing it. This is precisely what depreciation means. The value of almost all kinds of assets depreciates when you use them and sometimes, even if you do not use them. Depreciation can be offset against the relative expenditure of the asset, for example a machine that cost 10k that is worth 1k a year later could have been used to generate 100k of revenue for a business. The simple point here is that depreciation is simply a factor that you need to consider and weigh before investing in an asset.

The history and concept of depreciation goes back to the beginning of the 19th century. However, it was not used for tax purposes until the early 1900s. It was just used to determine the insured value of fixed assets throughout their useful life.

What causes depreciation? You might have an answer to this question at the back of your mind, but let us just help you refresh your memory: first of all, let's make it clear that depreciation happens to all kinds of items, it could be a car, residential or commercial property, machinery that you use for your business, the list goes on.

Basically, assets start depreciating as soon as we purchase them, because they start wearing out. The effluxion of time is also one of the biggest causes of depreciation, also, an asset becoming obsolete with developing new technologies is a form of depreciation. Consider supply and demand, the more desirable and object, the higher the price people are prepared to pay for it. With unique objects, one-of-a-kind type objects, the relative price tends to increase over time. This is because it is unique. When an object is not unique, like our car example, the price drops. Why? New cars depreciate in value because they are desirable when first released, as new models, shapes, designs and technologies appear, our desire shifts from the aging car to the latest model. Oddly, depreciation in cars has less to do with functionality or performance and more to do with clever marketing and human desire/perception. A car can work perfectly well but is worthless in financial terms because it is old, its age meaning that the demand is less, availability is typically higher (as less people buy them) so the "supply" outweighs the demand.

We will now take a look at some of the depreciation calculators provided by iCalculator, if you prefer, you can simply click on the links below to go straight to the tools. Alternatively, keep reading and discover more about depreciation and the different approaches to calculating depreciation.

Using the right Depreciation Formula and Approach for different assets

There are multiple approaches to calculating depreciation, the key is to understand which method to use for which asset. For example, you may want to keep your depreciation calculations simple and accurate over an extended period, the straight line depreciation is a good solution for these requirements. The straight line depreciation formula is mainly used for the assets that have a long useful life and one of the simplest methods there are for calculating depreciation. The straight line depreciation calculator provided below includes an online calculator and additional information on this accounting technique.

Straight Line Depreciation Calculator

As we discussed above, you will find the straight line depreciation calculator useful for assets for which it is easier to assume their depreciation rate. However, if you are dealing with more complex assets, such as computers or laptops you may want to go for the method that could give you more accurate results as the depreciation of an asset changes with the type of asset.

One of the very useful online tools is the percentage depreciation calculator which applies a periodic reduction based on the assets value. All you have to do is gather the details that are specified in the calculator instructions and insert them into the calculator. You can access the percentage depreciation calculator by clicking the link below:

Percentage Depreciation Calculator

For those who are unsure whether a straight line depreciation model or percentage depreciation model is best for their accounting purposes, iCalculator has designed a combined calculator which will calculate both depreciation formulas at the same time and allow you to compare the relative merits of each approach:

More Good Calculators for Calculating Depreciation

You may be wondering why calculating depreciation is so important, why should you be bothered to do these accounting calculations? Well, we can assure you that it is quite important to calculate depreciation of your assets with two important reasons being:

  1. Measurement and visibility of an assets current worth. An assets current value is not normally the initial price that you paid for it. You may spend more while you are using it and you might get some of it back when you are reselling it. Depreciation also lets you figure out the resale value in many cases. The value that the asset has depreciated, let's say in a year or any period of time of your choice, shows you the cost that you are paying for every time period that you are using the asset. This identified value is deducted from the total value and that actually is what we are looking for - depreciation expense.
  2. Tax Relief: Tax relief on asset depreciation is very common in most countries, though not all, and failing to account for depreciation is simply inviting a higher tax bill than necessary. Businesses are typically allowed to deduct the depreciation expenses from income to create a lower base for taxable income. Put simply, you really want to do depreciation calculations for your assets if you want to avail tax benefits from your government.

In addition to those 2 primary factors, depreciation allows you to quantify if and when it is viable to invest in replacement, repair or additional equipment. For businesses, the depreciation figures are a key component of the transformation model and bottom line / profitability calculation.

Depreciation Calculators Snapshot

All of iCalculators depreciation calculators include guides on how to collate the correct information and how to use the calculators to provide you with the relevant information to make an informed decision. We also detail, where appropriate, the relevant pros and cons of the calculation method, considerations you should keep in mind when reviewing the results and supporting tools to deepen your knowledge and/or complete complementary calculations.

Completing a depreciation calculator is simple, all you have to do is just choose the right kind of calculator and insert the relevant details in order to get the most accurate results.