How to Calculate and Solve for Depreciation Value | Straight line Method | Depreciation

June 12, 2020March 31, 2024 Loveth Idoko

Last Updated on March 31, 2024

The image above represents depreciation value. To calculate depreciation value, three essential value are needed and these parameters are Present Amount or Worth (P), Salvage Value (S) and Total Estimated Life of the Asset (N).

The formula for calculating depreciation value

D = (P – S) / N

Where:

P = Present worth or amount
N = Total estimated life of an asset
S = Salvage value

Let’s solve an example;
Find the depreciation value when the present amount or worth is 9, the salvage value is 4 and the total estimated life of an asset is 10.

This implies that;

P = Present worth or amount = 9
N = Total estimated life of an asset = 10
S = Salvage value = 4

D = (P – S) / N
So, D = (9 – 4) / 10
D = 5 / 10
D = 0.5

Therefore, the depreciation value is ₦0.5.

Read: How to Calculate and Solve for Depreciation Value | Declining Balance Method | Depreciation

Calculating the Present Amount or Worth when the Depreciation Value, the Total Estimated life of an Asset and the Salvage Value are Given

P = (D x N) + S

Where;

P = Present worth or amount
D = Depreciation Value
N = Total estimated life of an asset
S = Salvage value

Let’s solve an example;
Find the present amount or worth when the depreciation value is 22, the total estimated life of an asset is 12 and the salvage value is 8.

This implies that;

D = Depreciation Value = 22
N = Total estimated life of an asset = 12
S = Salvage value = 8

P = (D x N) + S
Then, P = (22 x 12) + 8
P = 264 + 8
P = 272

Therefore, the present amount or worth is 272.

Calculating the Salvage Value when the Depreciation Value, the Present Amount or Worth and the Total Estimated life of Asset are Given

S = P – (D x N)

Where;

S = Salvage Value
D = Depreciation Value
P = Present Amount or Worth
N = Total Estimated life of an Asset

Let’s solve an example;
Find the salvage value when the depreciation value is 14, the present amount or worth is 32 and the total estimated life of an asset is 2.

This implies that;

D = Depreciation Value = 14
P = Present Amount or Worth = 32
N = Total Estimated life of an Asset = 2

S = P – (D x N)
That means, S = 32 – (14 x 2)
S = 32 – 28
S = 4

Therefore, the salvage value is 4.

Calculating the Total Estimated life of an Asset when the Depreciation Value, the Present Amount or Worth and the Salvage Value are Given

N = ^{(P – S)} / _D

Where;

N = Total Estimated life of an Asset
D = Depreciation Value
P = Present Amount or Worth
S = Salvage Value

Let’s solve an example;
Find the total estimated life of an asset when the depreciation value is 20, the present amount or worth is 28 and the salvage value is 2.

This implies that;

D = Depreciation Value = 20
P = Present Amount or Worth = 28
S = Salvage Value = 2

N = ^{(P – S)} / _D
That is, N = ^{(28 – 2)} / ₂₀
N = ²⁶ / ₂₀
N = 1.3

Therefore, the total estimated life of an asset is 1.3.

How to Calculate Depreciation Value | Straight line Method Using Nickzom Calculator

Nickzom Calculator – The Calculator Encyclopedia is capable of calculating the depreciation value.

To get the answer and workings of the depreciation value using the Nickzom Calculator – The Calculator Encyclopedia. First, you need to obtain the app.

You can get this app via any of these means:

Web – https://www.nickzom.org/calculator-plus

To get access to the professional version via web, you need to register and subscribe for NGN 1,500 per annum to have utter access to all functionalities.
You can also try the demo version via https://www.nickzom.org/calculator

Android (Paid) – https://play.google.com/store/apps/details?id=org.nickzom.nickzomcalculator
Android (Free) – https://play.google.com/store/apps/details?id=com.nickzom.nickzomcalculator
Apple (Paid) – https://itunes.apple.com/us/app/nickzom-calculator/id1331162702?mt=8
Once, you have obtained the calculator encyclopedia app, proceed to the Calculator Map, then click on Economics under Engineering.

Now, Click on Depreciation under Economics

Now, Click on Depreciation Value under Depreciation

The screenshot below displays the page or activity to enter your values, to get the answer for the depreciation value according to the respective parameters which are the present amount or worth (P), salvage value (S) and total estimated life of the asset (N).

Now, enter the values appropriately and accordingly for the parameters as required by the present amount or worth (P) is 9, salvage value (S) is 4 and total estimated life of the asset (N) is 10.

Finally, Click on Calculate

As you can see from the screenshot above, Nickzom Calculator– The Calculator Encyclopedia solves for the depreciation value and presents the formula, workings and steps too.