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.
Reviewed by Countify's ACCA/FCCA chartered certified accountants · Updated
- Year 1 depreciation
- AED 11,000.00
- Total depreciation
- AED 55,000.00
- Year 1 monthly charge
- AED 916.67
For UAE corporate tax, depreciation in your IFRS accounts is generally deductible as recorded; there are no separate tax allowances.
| Year | Opening value | Depreciation | Closing value |
|---|---|---|---|
| 1 | AED 60,000.00 | AED 11,000.00 | AED 49,000.00 |
| 2 | AED 49,000.00 | AED 11,000.00 | AED 38,000.00 |
| 3 | AED 38,000.00 | AED 11,000.00 | AED 27,000.00 |
| 4 | AED 27,000.00 | AED 11,000.00 | AED 16,000.00 |
| 5 | AED 16,000.00 | AED 11,000.00 | AED 5,000.00 |
Results are estimates for general information, not tailored advice.
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 right.
Legal basis
We review this calculator whenever the FTA or Ministry of Finance issues a new decision or clarification.
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.
IFRS year-end accounts
We prepare IFRS financial statements, including fixed asset and lease schedules, ready for your auditor and your corporate tax return.