Equipment Depreciation Calculator

Why Contractors Lose Money Here

Depreciation is the systematic reduction in an asset's book value over its useful life. It is not a "loss" in the wastage sense — it is a real accounting fact that most contractors track only for tax filing, not for day-to-day project costing or resale timing. Once equipment is bought, purchase price sticks in memory as "what it's worth" indefinitely — without a running book-value figure, contractors routinely under-price resale or over-estimate collateral value when seeking equipment finance.

Real Site Example

A ₹25 lakh excavator bought 4 years into a 10-year useful life is worth well below the original purchase price on the books — under straight-line depreciation with a 10% salvage assumption, roughly ₹15 lakh — but many contractors still mentally value it near the ₹25 lakh purchase price when negotiating resale or trade-in.

Professional Best Practices

Disciplined contractors maintain a live depreciation schedule per asset, review it annually, and use current book value — not purchase price — for resale negotiation, insurance valuation and hire-vs-own decisions.

Engineering Checklist

• Maintain a per-asset depreciation schedule, not just a fleet-wide estimate
• Use current book value, not purchase price, in resale and trade-in negotiations
• Understand that this calculator's WDV is for internal costing — it is not the Income Tax Act's statutory WDV block rate used for tax filing
• Allocate annual depreciation across the specific projects an asset served, not as a lump company expense
• Track loan outstanding against equity position for financed equipment

Government & Standards References

• Income Tax Act depreciation (WDV method, prescribed block rates) — used separately for tax filing, distinct from this calculator's internal-costing WDV

How Experienced Contractors Handle This

Disciplined contractors maintain a live depreciation schedule per asset, review it annually, and use current book value — not purchase price — for resale negotiation, insurance valuation and hire-vs-own decisions.