Depreciation Calculator
Calculate how an asset's value declines over time for accounting and tax purposes. The method you use — and the deductions you can claim — vary significantly between countries.
Depreciation Rules by Country
| Country | System | First-Year Bonus | Standard Method |
|---|---|---|---|
| 🇺🇸 US | MACRS | Bonus depreciation (60% in 2024) | DB switching to SL |
| 🇬🇧 UK | Capital Allowances | AIA up to £1M (100%) | 18% WDA pool |
| 🇦🇺 AU | Tax depreciation | Instant asset write-off | Prime cost or dim. value |
| 🇨🇦 CA | CCA (Capital Cost Allowance) | Accelerated Investment Incentive | Varying CCA classes |
| 🌍 IFRS (global) | IAS 16 | None mandated | Straight-line preferred |
Frequently Asked Questions
What is the difference between straight-line and declining balance depreciation?
Straight-line depreciation deducts the same amount each year. Declining balance accelerates deductions — you claim more in early years and less later. The double declining balance (200% DB) method is often used under US MACRS for 5-year and 7-year property classes, maximizing early tax relief.
How does US MACRS differ from UK capital allowances?
US MACRS assigns assets to recovery periods (3, 5, 7, 15, 27.5, 39 years) and uses declining balance methods. UK capital allowances use a pooling system with a standard 18% writing-down allowance (WDA) per year on the pool balance, plus an Annual Investment Allowance (AIA) of up to £1 million for 100% first-year relief.
What is the difference between book depreciation and tax depreciation?
Book depreciation (used in financial statements per GAAP/IFRS) follows economic useful life using straight-line or units-of-production methods. Tax depreciation (US MACRS, UK capital allowances) is set by law and is typically faster than book depreciation, creating a temporary difference on the balance sheet known as deferred tax. This is why company accounts often show a deferred tax liability.