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