How eKapital Calculates Depreciation

Last updated: 2026-07-09 Summary:

eKapital offers two methods: straight-line and declining balance (200% double-declining by default, with a straight-line crossover).
Every method depreciates the depreciable base — acquisition cost minus salvage value — over the useful life in months.
The final period absorbs the rounding residual, so accumulated depreciation lands exactly on cost minus salvage — never above.

The building blocks

Depreciable base = acquisition cost − salvage value. Salvage is the residual you keep on the books; depreciation never drives net book value below it.
Useful life is expressed in months, so depreciation is a monthly figure and periods align with your monthly depreciation run.
Net book value (NBV) = acquisition cost − accumulated depreciation.

Amounts are rounded to two decimal places, half away from zero.

Straight-line

Straight-line spreads the depreciable base evenly:

monthly depreciation = (acquisition cost − salvage value) ÷ useful-life months

Every full month books the same amount until the base is exhausted.

Declining balance (200% with crossover)

Declining balance front-loads depreciation against the falling net book value:

monthly depreciation = net book value × monthly rate

If you don’t specify a rate, eKapital uses the 200% double-declining rate: (2 ÷ life-in-years) ÷ 12 per month. You can override the rate on the asset.

Because a pure declining-balance curve never quite reaches salvage, eKapital applies a straight-line crossover: for each period it also computes the straight-line amount over the remaining months (NBV − salvage) ÷ months left and books whichever is larger. Once straight-line wins, the schedule finishes the asset cleanly on time.

Exact landing in the final period

Rounding each month would otherwise leave a few centavos of drift. eKapital handles this precisely:

Intermediate periods are clamped so accumulated depreciation can never overshoot the depreciable base.
The final period takes whatever remains, so total accumulated depreciation ends exactly at cost − salvage and net book value ends exactly at salvage.

When an asset reaches that point it is marked fully depreciated, and later runs treat it as a no-op.

What eKapital does not offer

Units-of-production depreciation is not available — the two methods above are the full set.
Depreciation is a book figure. The BIR income-tax disallowance (for example the vehicle cap) is tracked as a separate memo that never changes book depreciation or any journal entry. See Depreciation caps and the lapsing schedule.