Depreciation schedule

What does this tool do?

You enter the asset's cost, its residual value and its useful life in years, and the tool gives you a full depreciation schedule, year by year. Each year has three figures:

• Depreciation expense charged to the income statement in that year.
• Accumulated depreciation up to the end of the year.
• Book value = cost − accumulated depreciation.

The tool calculates using two methods: straight-line and declining balance. It helps the accountant preparing the annual depreciation entries, and the business owner buying a vehicle or equipment who wants to know its effect on profit each year.

The calculation runs inside your browser, and none of the numbers you enter are sent to our servers.

How to use the depreciation calculator

1. Choose the method: straight-line or declining balance.
2. Enter the asset cost in SAR: the purchase price plus what is needed to get it ready for use.
3. Enter the residual value: the amount you expect from selling the asset at the end of its life. Enter zero if you expect no value.
4. Enter the life in years, from 1 to 50 years; it is rounded to the nearest whole number.
5. The schedule appears instantly and updates with every change to the numbers or the method.

The cost must be greater than zero, and the residual value must not exceed the cost.

How straight-line depreciation is calculated

With the straight-line method, the depreciable amount is spread evenly over the years of the asset's life:

Annual depreciation = (asset cost − residual value) ÷ life in years

Each year is charged the same amount, and in the final year the book value reaches exactly the residual value. This method suits assets used evenly throughout their life, such as buildings and furniture.

How declining balance depreciation is calculated

The tool uses the double declining balance method: the depreciation rate is twice the straight-line rate.

1. Rate = 2 ÷ life. For an asset with a 5-year life, the rate is 40%.
2. Each year's depreciation = book value at the start of the year × rate, so depreciation is higher in the early years and then declines.
3. If straight-line depreciation over the remaining years becomes larger than the declining balance amount, the tool switches to straight-line until the end of the asset's life.
4. The book value never falls below the residual value, and it reaches it in the final year.

An example of the switch: an asset costing 100,000 SAR with no residual value and a 5-year life. Depreciation is 40,000, then 24,000, then 14,400; the tool then switches to straight-line, giving 10,800 in each of the last two years.

Worked example: straight-line

A truck costing 120,000 SAR, with a residual value of 20,000 SAR and a 5-year life. Annual depreciation = (120,000 − 20,000) ÷ 5 = 20,000 SAR.

After five years, accumulated depreciation reaches 100,000 SAR and the book value is 20,000 SAR, which is the residual value.

Worked example: declining balance

The same truck using the declining balance method. Rate = 2 ÷ 5 = 40% of the book value at the start of each year.

In year four, declining balance depreciation would have been 10,368 SAR and would have taken the book value below the residual value, so it was limited to 5,920 SAR. That is why no depreciation remains for year five. Total depreciation is the same under both methods (100,000 SAR); the difference is how it is spread over the years.

Important notes

• The schedule is annual and calculates each full year; it does not prorate the first year's depreciation by the purchase date. If you bought the asset mid-year, adjust the first year's depreciation by the proportion of months.
• The usual depreciation entry: debit Depreciation expense, credit Accumulated depreciation, for the year's expense from the schedule.
• For Zakat and tax purposes in the Kingdom, statutory depreciation rates apply to asset groups, and these may differ from the accounting depreciation in this schedule.

Frequently asked questions

Content last reviewed: 2026-10-26