CANADA
Calculate annual depreciation expense for your business assets using straight-line, declining balance, or CCA methods.
| Year | Beginning Value | Depreciation | Accumulated | Ending Book Value |
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Note: Depreciation is a non-cash expense that reduces your taxable income. For tax purposes in Canada, use CCA (Capital Cost Allowance) rates set by the CRA. Book depreciation for financial statements may differ from tax depreciation. Consult with a tax professional to ensure you're maximizing your deductions. For bookkeeping support, contact EpicBooks.
Depreciation spreads the cost of a business asset over its useful life. Instead of expensing the full purchase price in year one, you deduct a portion each year until the asset reaches its salvage value. This matches the expense to the periods when the asset generates revenue.
For financial reporting, most Canadian businesses use straight-line depreciation because it’s simple and predictable. For tax purposes, the CRA requires Capital Cost Allowance (CCA), which groups assets into classes with prescribed declining-balance rates. CCA uses the half-year rule: only 50% of a new asset’s cost is eligible for depreciation in the year you acquire it.
Common assets you can depreciate include vehicles, computers, office furniture, equipment, and buildings. Land cannot be depreciated because it doesn’t wear out.
Disclaimer: This calculator provides estimates for planning purposes. Book depreciation for financial statements may differ from CCA for tax filing. The Accelerated Investment Incentive (AII) may allow enhanced first-year deductions for assets acquired after November 20, 2018. Consult with a tax professional to ensure you’re using the correct CCA class and maximizing your deductions.
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