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

Depreciable Cost Definition

What is a depreciable cost?

A depreciable cost is a measure of 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