Annual Depreciation Rate (ADR) Calculator

Finance

The Annual Depreciation Rate (ADR) Calculator finds the straight-line depreciation rate and the annual depreciation amount for an asset. The rate is simply 1 divided by the recovery period (useful life), and the annual amount is the depreciable base spread evenly over that period.

Formula

ADR = 1 / Recovery Period; Annual Depreciation = Depreciable Base / Recovery Period
  • The straight-line annual depreciation rate is 1 divided by the recovery period (useful life in years), shown as a percentage.
  • The annual depreciation amount spreads the depreciable base evenly across each year of the recovery period.
  • For example, a 5-year recovery period gives a rate of 1/5 = 20% per year.
  • The depreciable base is usually the asset's cost minus its salvage value.

Example Calculation

Inputs
  • Depreciable Base (PKR): 100000
  • Recovery Period (years): 5

A depreciable base of 100,000 over a 5-year recovery period gives a rate of 1/5 = 20% per year and an annual depreciation of 20,000.

Frequently asked questions

What is the annual depreciation rate?
It is the fraction of an asset's depreciable base written off each year under straight-line depreciation, equal to 1 divided by the useful life.
How is the annual depreciation amount found?
Divide the depreciable base by the recovery period. With a 100,000 base over 5 years, that is 20,000 per year.
What is the depreciable base?
It is typically the asset's purchase cost minus its expected salvage (residual) value.
Does this use straight-line depreciation?
Yes. It assumes equal depreciation each year. Methods like declining balance produce different yearly amounts.
Can I use any currency?
Yes. Enter the depreciable base in your local currency; the rate is currency-independent and the annual amount uses the same currency.