Depreciation Calculator & Straight-Line & WDV

Two common methods: straight-line (SLM), where annual depreciation = (cost − salvage) ÷ useful life, the same each year; and written-down-value (WDV / declining balance), where each year's depreciation is a fixed percentage of the remaining book value, so it's higher early on. This tool computes both with a year-by-year schedule.

SLM spreads the depreciable amount (cost minus salvage) evenly over the asset's life. An ₹8,00,000 machine with ₹80,000 salvage over 10 years depreciates ₹72,000 every year. It's simple and predictable, good for budgeting a steady replacement fund. The book value falls in equal steps to the salvage value.

WDV (declining balance) applies a fixed rate to the reducing book value each year, so depreciation is large at first and shrinks over time — matching how machinery loses value fastest when new. A 20% WDV rate depreciates 20% of whatever the asset is currently worth each year. It never quite reaches zero.

SLM is simplest and best for even budgeting; WDV better reflects real value loss (steep early) and is the method many tax systems mandate for machinery. For a replacement fund, SLM gives a steady annual amount; for tax or true book value, follow the method your jurisdiction requires. The tool shows both.

The estimated worth of the asset at the end of its useful life — what you could sell it for as scrap or second-hand. In SLM it's subtracted from cost before spreading; in WDV the book value declines toward (but technically never reaches) it. Estimate it realistically; many farm assets retain 5–15% salvage.

The asset's value on your books at any point: cost minus the depreciation accumulated so far. It falls each year as you depreciate. The tool's schedule shows the book value at the end of every year, so you can see what the machine is 'worth' for accounts, insurance or a sale decision.

Machinery is a big investment that steadily loses value — ignoring that overstates your profit and leaves you with no fund to replace worn-out equipment. Tracking depreciation gives a true cost of using the asset, feeds a sensible replacement plan, and (where applicable) reduces taxable income.

Use a realistic working life for the asset — often 8–12 years for a tractor, less for hard-worked implements, more for buildings. Tax rules may prescribe a life or rate. A shorter life means higher annual depreciation. Enter the life that matches your real expected use.

Yes — treating depreciation as a real, set-aside 'sinking fund' is good practice: each year you put away roughly the annual depreciation so that when the machine wears out you can afford to replace it without a sudden loan. The tool's annual figure tells you how much to save.

Very much — depreciation is usually the largest fixed cost of owning machinery, and it's spread over the hours you use it. The Machinery Cost tool combines depreciation with interest, repairs and fuel into a cost per hour and per acre; use this tool to nail down the depreciation part.