Activity Depreciation Calculator
Calculate depreciation based on actual usage or production rather than time.
Σ The Formula
Real World Examples
# About This Calculator
Activity-based depreciation (also known as the Units-of-Production method) calculates an asset's loss in value based on how much it is actually used, rather than how much time has passed. This is ideal for equipment like vehicles (measured in miles) or machinery (measured in units produced).
This method matches the expense more accurately with the revenue the asset helps generate. If a machine is used heavily in Year 1 and sits idle in Year 2, the activity method will assign higher depreciation to Year 1, reflecting the actual "wear and tear."
To use this method, you need the asset's total purchase cost, its estimated salvage value (amount you expect to sell it for at the end of its life), and the total estimated capacity of the asset over its entire useful life.
Our calculator provides a clear breakdown of the depreciable base and the per-unit rate, helping business owners and accountants perform more precise financial reporting.
How To Use
- Enter the asset's original Cost.
- Enter the estimated Salvage Value.
- Enter the Total Lifetime Activity (e.g., total miles or total units).
- Enter the Current Period Activity to see the depreciation for that specific period.
Frequently Asked Questions
When should I use activity depreciation instead of straight-line?+
Can I switch depreciation methods mid-way?+
What is the 'Depreciable Base'?+
Is Activity Depreciation Calculator free to use?+
How accurate is Activity Depreciation Calculator?+
Can I use Activity Depreciation Calculator on my phone?+
About
Activity-based depreciation (also known as the Units-of-Production method) calculates an asset's loss in value based on how much it is actually used, rather than how much time has passed. This is ideal for equipment like vehicles (measured in miles) or machinery (measured in units produced).
This method matches the expense more accurately with the revenue the asset helps generate. If a machine is used heavily in Year 1 and sits idle in Year 2, the activity method will assign higher depreciation to Year 1, reflecting the actual "wear and tear."
To use this method, you need the asset's total purchase cost, its estimated salvage value (amount you expect to sell it for at the end of its life), and the total estimated capacity of the asset over its entire useful life.
Our calculator provides a clear breakdown of the depreciable base and the per-unit rate, helping business owners and accountants perform more precise financial reporting.