UAE depreciation calculator
Build a full depreciation schedule for a fixed asset. Choose straight-line or reducing-balance and see the year-by-year charge, accumulated depreciation and remaining book value.
Asset details
Expected value at the end of the asset's life. Set to 0 if none.
Summary
Straight-line: equal annual charge over the useful life.
Post depreciation automatically from your fixed-asset register.
Get startedDepreciation schedule
| Year | Opening value | Depreciation | Accumulated | Book value |
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Results are estimates for guidance only. The right method, useful life and rate depend on how the asset is used and on IFRS and UAE Corporate Tax rules. Confirm your treatment with the FTA or a qualified accountant before posting.
How depreciation is calculated
Depreciation spreads the cost of a fixed asset — machinery, vehicles, IT equipment, fit-out — across the years it is used, rather than expensing it all at once. Under IFRS you pick a method and useful life that reflect how the asset delivers value. The two most common methods are straight-line and reducing balance.
Straight-line
Annual charge = (cost − salvage) ÷ useful life. AED 100,000 cost, AED 10,000 salvage, 5-year life = AED 18,000 every year.
Reducing balance
Annual charge = opening book value × rate. AED 100,000 at 30% = AED 30,000 in year one, AED 21,000 in year two, and so on — never below salvage.
The depreciation charge is an expense on the income statement, and accumulated depreciation reduces the asset's carrying value on the balance sheet. Reducing balance front-loads the expense, which better matches assets that lose most of their value early, while straight-line keeps the charge predictable.
For UAE Corporate Tax, accounting depreciation generally flows into taxable income, subject to the specific rules in the legislation. This tool gives an indicative schedule; confirm the right method and life for your situation.
From fixed-asset register to financial statements
See how depreciation lands in your accounts in the IFRS financial statements guide, and set up the right ledgers with our UAE chart of accounts. AIMuhaseb posts depreciation automatically each period.
Depreciation calculator questions
What is the difference between straight-line and reducing-balance depreciation?
Straight-line spreads the depreciable amount (cost minus salvage value) evenly over the asset's useful life, so the annual charge is the same every year. Reducing-balance (also called declining-balance) applies a fixed percentage to the asset's remaining book value each year, so the charge is higher early on and falls over time. Straight-line suits assets that wear evenly; reducing-balance suits assets that lose most value in their early years, like vehicles and IT equipment.
How is straight-line depreciation calculated?
Annual depreciation = (cost − salvage value) ÷ useful life in years. For example, an asset costing AED 100,000 with a AED 10,000 salvage value and a 5-year life depreciates by (100,000 − 10,000) ÷ 5 = AED 18,000 each year, leaving a book value of AED 10,000 at the end.
How is reducing-balance depreciation calculated?
Each year's depreciation = opening book value × the depreciation rate. The book value falls each year, so the charge falls too. For example, AED 100,000 at 30% gives AED 30,000 in year one (book value AED 70,000), AED 21,000 in year two (book value AED 49,000), and so on. This calculator stops depreciating once the book value reaches the salvage value.
Does the UAE prescribe a fixed depreciation rate?
For financial reporting under IFRS, businesses choose a depreciation method and useful life that reflect how the asset is consumed — there is no single mandated rate. For UAE Corporate Tax, accounting depreciation generally flows through taxable income, with specific rules and any adjustments set out in the Corporate Tax legislation. Confirm the correct treatment for tax with a specialist.
What is salvage or residual value?
Salvage value (residual value) is the amount you expect to recover when you dispose of the asset at the end of its useful life. It is subtracted from cost to find the depreciable amount under straight-line, and it acts as the floor below which reducing-balance depreciation stops. If you expect nothing at the end, set it to zero.
Where does depreciation appear in the financial statements?
The annual depreciation charge is an expense in the income statement, while accumulated depreciation reduces the carrying value of the asset on the balance sheet. Keeping a proper fixed-asset register and posting depreciation each period is part of producing IFRS-based financial statements — something AIMuhaseb automates from your chart of accounts.
Keep going
IFRS financial statements
How depreciation flows into your accounts.
UAE chart of accounts
Set up fixed-asset and depreciation ledgers.
Accounting services
Hand your books to a UAE team.
Depreciation, posted automatically
AIMuhaseb keeps a fixed-asset register and posts depreciation each period, straight into your IFRS financial statements.
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