1 | Depreciation Comparison CalculatorĀ |
2 | Overview |
3 | Calculation |
Our depreciation comparison calculator allows the comparison of straight-line depreciation as well as the declining balance depreciation for the purposes of analysis.
So, in order to use this tool, you must first have the values for straight-line and declining balance (percentage depreciation) of your asset. You can calculate both these values individually with our straight-line depreciation calculator and percentage depreciation calculator.
Now, after determining these values, we are ready to use the depreciation comparison calculator.
Depreciation is a terminology from the accounting jargon. It is the calculation of the value of used assets during a particular time-period. It describes the expenditures we indirectly pay to use those assets.
Companies employ depreciation models to spread the cost of physical assets over a long period of time rather than only in the year in which the asset is bought. Scattering the depreciated cost and comparing them in different depreciation models help companies have a clear picture of their real-life earnings and profit.
As has been mentioned above, comparison depreciation calculator requires values for your asset from straight-line and declining balance model which you can calculate separately with the following formulas:
\(\text{Straight line rate} = \text{Annual depreciation expenditures} / \text{Asset cost} – \text{Salvage value}\)
Note that in the straight-line model, an asset depreciates in value at a uniform rate over the given period of time.
\(Declining Balance = (Netbook value – Residual value) \times rate of depreciation (\%)\)
It is the depreciated value of an asset given at an annual percentage.
Make sure that you know the following:
Now that you have the formulas, you can calculate the straight-line and declining balance to proceed for the depreciation comparison calculation.
All that you have to do now is follow the very simple steps stated below to proceed for depreciation comparison.
Our calculator would display the comparison for you to analyze with a very elegant user-interface.
Your Review Will Appear Soon.