Depreciation Calculator

Depreciation refers to the decrease in value or usefulness of an asset over time. It is a concept commonly used in accounting and finance to allocate the cost of an asset over its useful life. When an asset is acquired, such as a vehicle or machinery, it is expected to wear out, become obsolete, or lose value due to factors like usage, technological advancements, or market conditions. Depreciation is the accounting method used to systematically recognize this decrease in value as an expense on the company's financial statements. There are various methods of calculating depreciation, including straight-line depreciation, declining balance depreciation, and units of production depreciation. Each method has its own formula and assumptions regarding the useful life and salvage value of the asset.