# Farm Equipment Depreciation Calculator

> Depreciate a tractor or farm machine by straight line, declining balance or sum-of-years’ digits, with each year’s charge, book value and a full schedule.

Category: Agriculture · Applies to: Worldwide · Last updated: 2026-10-29
Interactive calculator: https://calculators.geekmidst.com/calculators/farm-equipment-depreciation-calculator

Depreciation spreads a machine’s cost, less what you expect to sell it for, over its useful life. The method decides how much falls in the early years.

Also called: Tractor depreciation calculator, Machinery depreciation calculator.

## Inputs
- Purchase cost (default 50000)
- Salvage (trade-in) value at the end (default 5000)
- Useful life (unit years; default 10)
- Method (options: Straight line, Double declining balance (200%), 150% declining balance, Sum of years’ digits; default ddb)
- Show year (default 3)
- Currency

## Results
- Depreciation in that year
- Book value at the end of that year
- Depreciation to date
- First-year depreciation
- That year’s charge as a share of cost

## Formula

```
Straight line = (C − S) ÷ L;  Declining balance = Book × k ÷ L, switching to straight line when that is larger;  SYD = (C − S) × (L − y + 1) ÷ (L(L+1)/2)
```

Where:
- C: purchase cost
- S: salvage value
- L: useful life in years
- k: 2 for double declining, 1.5 for 150%
- y: year number

## Worked example
1. Double declining rate = 2 ÷ 10 = 20% of book value.
2. Year 1: 50,000 × 20% = 10,000; year 2: 40,000 × 20% = 8,000.
3. Year 3: 32,000 × 20% = 6,400, leaving a book value of 25,600.

**Result:** By double declining balance, a 50,000 machine is charged 6,400 in year 3 and has a book value of 25,600 at the end of it.

## What the result means

Machinery loses value fastest in its early years, which declining-balance methods reflect better than straight line. For cost-of-ownership budgets, add interest on the money tied up, insurance and housing to the depreciation.

## Assumptions and limits
- Full-year depreciation from year 1, with no partial first year.
- Declining balance switches to straight line when that gives the larger charge, so the book value reaches salvage at the end of the life.
- Tax depreciation systems (such as MACRS in the US or capital allowances in the UK) have their own rates and conventions and are not applied.

## Questions

### Which method should I use?

For management accounts, choose the one that best matches how the machine loses market value, often declining balance. For tax, use the method your tax authority prescribes.

### How do I estimate salvage value?

Look at auction and dealer prices for the same model at the age you expect to trade it in.

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_This calculator gives estimates for planning. It is not financial advice, and lenders’ actual terms, fees and rounding may differ._

Source: GM¹X CalcVerse — https://calculators.geekmidst.com/calculators/farm-equipment-depreciation-calculator