Cars, dispassionate approximative many other long-term assets, depreciate in reward over future. It is earnest, mainly whether you are a small-business owner, to calculate the depreciation of your machine's reward over extent as there are some customs benefits to doing this. Depreciation is a quite effortless formula, and anyone can account it to impel the ongoing monetary worth of his or her vehivle.
Instructions
1. Fix upon the salvation fee of the automobile. Rescue assessment is determined as the "Blue Book" value of the car at the point when depreciation is being calculated. For example: ($20,000 - $5,000) / 3 = $5,000 per year.4. Multiply the value from Step 3 by the number of years since you purchased the vehicle, and subtract that value from the purchase value of the car to get the depreciated value.
Calculate the estimated useful life of the car by subtracting the number of years since its production from eight, the normal total lifespan of a vehicle.
3. Fill the values from Steps 1 and 2 into this formula: cost of car minus salvage value of car divided by estimated useful life. The result equals the annual depreciation value. Look up the value of your make and model of vehicle in the Kelley Blue Book.2. Determine the "useful life" of your vehicle.
Example: $20,000 - (3 years x $5,000) = $5,000.
