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Calculating depreciation: straight-line in five steps

Enter the purchase price, the residual value and the useful life, and you immediately see what you depreciate each year and how the book value falls. The calculation happens in your own browser; nothing is sent or stored.

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Enter the figures; the calculation appears here.

The formula

With straight-line depreciation you spread the depreciable amount evenly over the useful years:

Straight-line depreciation

(purchase price − residual value) ÷ number of useful years = depreciation per year

The residual value is what the asset is still worth at the end of the day. You leave it in place: you do not depreciate a car that is still worth four thousand euro after five years down to zero.

A worked example

A machine costing € 24,000 with a residual value of € 4,000 and a useful life of five years: (24,000 − 4,000) ÷ 5 = € 4,000 per year.

YearDepreciationBook value
Purchase—24,000
Year 14,00020,000
Year 24,00016,000
Year 34,00012,000
Year 44,0008,000
Year 54,0004,000 (residual value)

What to watch out for

  • Start depreciating from the moment you put the asset into use, not from 1 January. If you buy something in December, the depreciation for that year is small.
  • The useful life is an estimate. Five years is usual for a car, machines often last longer and computers shorter.
  • For tax purposes there are limits on depreciation and a minimum period; those can differ from what you do in the annual accounts.
  • Selling the asset earlier? Then the difference between the proceeds and the book value is a gain or a loss on disposal.
  • Record the method and the period in the notes to your annual accounts.

The terms that go with it — depreciation, book value and residual value — are explained briefly in the glossary. A full example with a car is in depreciating a company car.

Frequently asked questions

How do I calculate the annual depreciation?

Subtract the residual value from the purchase price and divide that by the number of useful years. For a machine costing 24,000 euro with a residual value of 4,000 euro over five years, that is (24,000 − 4,000) / 5 = 4,000 euro per year.

What is the difference between straight-line and declining-balance depreciation?

With straight-line depreciation the amount is the same every year. With declining-balance depreciation the amount is higher in the first years and lower afterwards, because you calculate on the remaining book value. Straight-line is the usual method in the Netherlands.

Can I use the same depreciation for tax?

Often yes, but not always. For tax purposes there are limits and minimum periods that can differ from your commercial depreciation. The difference between the two belongs in the reconciliation between your result and your taxable profit.

Is the result kept when I leave this page?

No. The calculation happens in your own browser and nothing is sent or stored. You can keep the input in the address bar to share a calculation or find it again later.

Read more

Prepare your annual accounts yourself?

Work through the wizard, check your figures and download the annual accounts and the KVK filing documents as PDFs. € 60,44 per financial year, once.

Start your annual accountsView a sampleSee how it works first

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This calculator gives a general outcome. Check with the Tax and Customs Administration (Belastingdienst) or an accountant what applies in your situation. ZelfJaarrekening.nl is a tool, not an accounting firm; you cannot derive rights from this explanation.