Calculators

Straight line or diminishing value depreciation, year by year

Depreciate an asset and show the working.

The two methods diverge sharply on the same asset. Straight line spreads the deduction evenly across the useful life. Diminishing value applies the rate to the reducing book value, so it front-loads the deduction heavily and never reaches zero on its own. Which is better depends entirely on when the owner wants the deduction, so the year by year schedule is the useful part of this answer, not the first year figure.

additional_costs are capitalised into the cost base, which is where delivery and installation belong. salvage_value acts as a floor under both methods, and the last year of a straight line life takes only what is left, so rounding cannot push the book value below it.

ONE IMPORTANT LIMIT. This is the arithmetic of the two methods. It is NOT a lookup of Inland Revenue's prescribed rates, which vary by asset class and are published in the IRD depreciation rate finder. Someone who needs to know the right RATE for a particular asset needs that finder; this computes what a given rate produces. Do not invent a rate to feed it.

post/v1/depreciation

Request

  • Base URL: https://api.calculate.co.nz
  • URL: https://api.calculate.co.nz/v1/depreciation
  • Auth: API key in header X-API-Key

Request body

initial_costnumber required

Purchase price of the asset.

method'straight_line' | 'diminishing_value'

Which method to apply.

additional_costsnumber

Costs capitalised into the asset, such as delivery or installation.

salvage_valuenumber

Expected residual value. Acts as a floor under both methods.

useful_life_yearsinteger nullable

Years of life. Required for straight line.

annual_rate_pctnumber nullable

Rate per year as a percentage. Required for diminishing value.

years_to_scheduleinteger nullable

How many years to show. Defaults to the useful life, or ten.

Example request

{
  "additional_costs": 1200,
  "annual_rate_pct": 30,
  "initial_cost": 45000,
  "method": "diminishing_value",
  "salvage_value": 5000,
  "years_to_schedule": 5
}

Response

The full schedule, the first year charge and the closing book value.

disclaimerstring required

Scope and limits of this calculation.

Example response

{
  "disclaimer": "The arithmetic of the two methods on a rate you supply. It is not a lookup of Inland Revenue's prescribed rates, which vary by asset class. Not tax advice.",
  "result": {
    "annual_rate_pct": 30,
    "depreciable_amount": 41200,
    "final_book_value": 7764.83,
    "first_year_depreciation": 13860,
    "inputs": {
      "additional_costs": 1200,
      "annual_rate_pct": 30,
      "initial_cost": 45000,
      "method": "diminishing_value",
      "salvage_value": 5000,
      "years_to_schedule": 5
    },
    "method": "diminishing_value",
    "salvage_value": 5000,
    "schedule": [
      {
        "closing_value": 32340,
        "cumulative_depreciation": 13860,
        "depreciation": 13860,
        "opening_value": 46200,
        "year": 1
      },
      {
        "closing_value": 22638,
        "cumulative_depreciation": 23562,
        "depreciation": 9702,
        "opening_value": 32340,
        "year": 2
      },
      {
        "closing_value": 15846.6,
        "cumulative_depreciation": 30353.4,
        "depreciation": 6791.4,
        "opening_value": 22638,
        "year": 3
      },
      {
        "closing_value": 11092.62,
        "cumulative_depreciation": 35107.38,
        "depreciation": 4753.98,
        "opening_value": 15846.6,
        "year": 4
      },
      {
        "closing_value": 7764.83,
        "cumulative_depreciation": 38435.17,
        "depreciation": 3327.79,
        "opening_value": 11092.62,
        "year": 5
      }
    ],
    "total_cost": 46200,
    "total_depreciation": 38435.17
  }
}

Changes

No recorded changes to this operation across all 1 revision of this API.