Enter the total cost and the salvage value into the calculator to determine the depreciable cost.

## Depreciable Cost Formula

The following formula is used to calculate a depreciable cost:

DC = TC - SV
• Where DC is the depreciable cost
• TC is the total original cost
• SV is the salvage value

To calculate the depreciable cost, subtract the salvage value from the total original cost.

## Depreciable Cost Definition

What is a depreciable cost?

A depreciable cost measures the total cost or price that an item or asset has lost due to depreciation. This depreciable cost is important for determining depreciation %, as well as tax write-offs for the loss in value.

## Example Problem

How to calculate a depreciable cost?

The following example problem outlines the steps needed to calculate a depreciated cost of an asset. In this case, the asset will be a car, which is one of the most commonly owned depreciating assets.

First, determine the original cost. In this case, the original cost is found to be $20,000.00. Next, determine the salvage value. This is the amount of value a person could get for the asset currently. For this example, the salvage value is$12,000.00.

Finally, calculate the depreciable cost using the formula above:

DC = TC – SV

DC = $20,000 –$12,000

DC = \$8,000.00