Units of Production Depreciation
Match your expenses with your productivity. This calculator is ideal for machinery, vehicles, and equipment where wear and tear is driven by use rather than time.
What is the Units of Production depreciation method?
The units of production method depreciates an asset based on its actual usage or output rather than the passage of time. It is common for manufacturing equipment, vehicles (mileage), or natural resource extraction.
How do I find the "Depreciation per Unit"?
Depreciation per Unit = (Asset Cost - Salvage Value) / Total Estimated Units of Production over the asset's life.
When is this method preferred?
It is preferred when an asset's value is tied directly to its productivity. For example, a printing press that prints 1 million pages will wear out based on pages printed, not whether it takes 2 years or 10 years to reach that total.
Does this method account for time?
No. If the equipment is idle for an entire year, there is zero depreciation expense recorded under this method for that year, regardless of how much time has passed.