# Depreciation calculator

> Straight-line depreciation spreads (cost − residual value) evenly over the asset's useful life: an AED 60,000 asset with a AED 5,000 residual value over 5 years depreciates by AED 11,000 a year. Reducing balance charges a fixed percentage of the remaining value, so more is expensed in the early years.

Interactive calculator: https://www.countify.ae/tools/depreciation-calculator · Updated 2026-10-14 · Countify UAE

## Year 1 depreciation on a AED 60,000 asset

Residual value AED 5,000.

| Life / method | Year 1 depreciation | Total depreciation |
| --- | --- | --- |
| 3 years, straight line | AED 18,333.33 | AED 54,999.99 |
| 5 years, straight line | AED 11,000.00 | AED 55,000.00 |
| 5 years, reducing balance | AED 24,000.00 | AED 55,000.00 |

Reducing balance front-loads the expense; total depreciation is the same.

## Choosing useful lives

IFRS asks for the asset's expected useful life to the business, not a tax table. Common ranges used by UAE SMEs: laptops 3 years, furniture 5 years, vehicles 4–5 years, fit-out over the lease term. Review lives and residual values each year end.

## Depreciation and corporate tax

The UAE has no separate capital allowances: depreciation in IFRS accounts is generally deductible as recorded. That makes a sensible fixed asset register part of getting the [taxable income](https://www.countify.ae/tools/taxable-income-calculator) right.

## Legal basis

- IAS 16 Property, Plant and Equipment (https://www.ifrs.org/issued-standards/list-of-standards/ias-16-property-plant-and-equipment/)

## Frequently asked questions

### What is the formula for straight-line depreciation?

(Cost − residual value) ÷ useful life in years.

### Is depreciation tax deductible in the UAE?

Generally yes, as recorded in IFRS-compliant accounts.