Depreciation Calculator · Practical guide
Straight Line vs Double Declining Depreciation
Both methods depreciate the same total amount — they just disagree about when, and timing drives taxes and reported profit.
At a glance
Quick answer
Straight line and double declining balance depreciate exactly the same total over an asset's life — cost minus salvage value — but the timing is completely different. On a $50,000 asset with $5,000 salvage and 5-year life, straight line takes $9,000 every year while double declining takes $20,000 in year one.
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Depreciation Calculator
Enter your own values, then compare the result with the examples below.
Results
| Year | Depreciation | Accumulated Depreciation | Book Value |
|---|
Same Asset, Two Schedules
| Year | Straight line | Double declining |
|---|---|---|
| 1 | $9,000 | $20,000 |
| 2 | $9,000 | $12,000 |
| 3 | $9,000 | $7,200 |
| 4 | $9,000 | $4,320 |
| 5 | $9,000 | $1,480 |
| Total | $45,000 | $45,000 |
By year three the two methods cross over: double declining has already expensed $39,200 (87% of the base) while straight line sits at $27,000 (60%).
What the Timing Difference Means
- Profit: double declining depresses early earnings and flatters later ones; straight line keeps reported profit steady.
- Cash flow: larger early deductions mean smaller tax bills in the years when the asset is newest and most productive.
- Book value: straight line shows a higher book value mid-life, which matters for loan covenants and balance-sheet ratios.
Choosing Between Them
Match the method to how the asset actually loses value. Buildings and furniture wear evenly — straight line. Vehicles, computers, and phones lose most value up front — double declining. Run both schedules above and compare the year-by-year book values before you commit.
Frequently Asked Questions
Do both methods always total the same depreciation?
Yes. Every method stops at salvage value, so total depreciation is always cost minus salvage — $45,000 in the example. Only the year-by-year split changes.
Which method gives a bigger tax deduction early on?
Double declining balance. Its year-one deduction on the example asset is $20,000 versus $9,000 for straight line, which improves early cash flow for a profitable business.
Can I switch methods after I start?
Switching is an accounting change that generally requires justification and prospective adjustment. For taxes, MACRS dictates the schedule and handles its own switch from declining balance to straight line.
Which method do investors prefer to see?
Neither is inherently better for analysis. Straight line produces smoother earnings, while accelerated methods can look more conservative early on. Consistency from year to year matters most.