Depreciation on Furniture

Article byPranjal Jain
Reviewed byDheeraj Vaidya, CFA, FRM

What is Depreciation on Furniture?

Depreciation of furniture in accounting terminology can be defined as the fall or reduction in the value of furniture, i.e., any movable asset used to make any room, office, factory, etc., suitable for desired working conditions due to wear and tear use and bypassing of time. In other words, it can be described as part of furniture cost price, which has been charged as an expense in one accounting period.


Depreciation on Furniture

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How to Calculate Depreciation on Furniture?


For better understanding, let us take the help of numerical examples.

You can download this Depreciation on Furniture Excel Template here – Depreciation on Furniture Excel Template

Straight Line Method – Example #1

On 01/01/2019Mark Inc. purchased office furniture like tables and chairs worth $10,000. The rate of depreciation is 10% straight-line method. Calculate yearly depreciation to be booked by Mark Inc.


  • Yearly depreciation to be booked under Statement of Profit & Loss will be ($10,000 x 10%) = $1,000 annum.

Written Down Value Method – Example #2

On 01/01/2019Mark Inc. purchased office furniture like tables and chairs worth $10,000. The rate of depreciation is 10% Written Down Value Method. Calculate yearly depreciation to be booked by Mark Inc on 31/12/2019 and 31/12/2020.


The calculation of yearly depreciation under WDVM for 2019 and 2020 is as follows:

As on 31/12/2019:

  • 10% of WDV i.e. $10,000 x 10% = $1,000

As on 31/12/2020:

  • 10% of WDV i.e. $10,000 – $1,000 (2019 depreciation) = $9,000
  • Depreciation as on 31/12/2020 = $9,000 x 10% = $900

Example #3

On 01/01/2018, Henry Trading Inc., a cloth manufacturer, purchased furniture worth $10,000 for office maintenance. The rate of depreciation is 25% D.B. You are required to calculate yearly depreciation and determine the year in which the asset’s value will be Nil or negligible.


Depreciation on the furniture will be calculated as follows:

Depreciation on Furniture Example 3
Note: Please refer above given excel template for a detailed calculation of depreciation.

Accordingly, 2032 will be the year furniture value will be NIL or negligible. Sometimes, assets may be sold at the end of their useful life and generate some monetary benefits. Such an amount must be reduced from the asset’s total value before calculating depreciation. For Example, consider a straight-line method of depreciation; Furniture purchased for $11,000 has a useful life of 10 years and can be sold at the end of its useful life for $1,000. Here, for calculating depreciation, we need to determine depreciable value by reducing scrap sale value, i.e., $11,000 – $1,000, which is $10,000, and this amount will be split between 10 years equally. Therefore, annual depreciation will be $1,000 ($10,000 / 10).

Depreciation Rates for Furniture

Different prevailing laws prescribe different rates for furniture depreciation. Generally, under the US Prevailing laws, furniture, fixtures, and related equipment life are assumed to be seven years in case furniture is used in office locations. However, the furniture life is reduced by two years and assumed as five years in case the asset is used in areas other than office premises. Generally, the method of tax depreciation is 200% Declining Balance (D.B.)

How to Depreciate Furniture?

Determining the depreciation method for furniture is an accounting policy that the entire organization must uniformly adopt over different accounting periods. However, the policy may be changed if the situation demands or due to a change in regulations. Calculating depreciation on furniture is the same as calculating depreciation on any other asset like machinery or vehicle. The only difference is the depreciation rate of the asset and the useful lifeUseful LifeUseful life is the estimated time period for which the asset is expected to be functional and can be put to use for the company’s core operations. It serves as an important input for calculating depreciation for assets which affects the profitability and carrying value of the more of the asset.


Depreciation can be said as the reduction in the value of assets due to continuous wear aDepreciation can be said to reduce the value of assets due to continuous wear and tear use of the asset or bypassing of time. Furniture can be described as any movable asset like a table, chair, etc., used to make any office or other place suitable for working. Per prevailing laws and regulations, different methods may be prescribed for depreciating furniture. Some common methods are the straight-line method of depreciation, the Declining Balance methodDeclining Balance MethodIn declining balance method of depreciation or reducing balance method, assets are depreciated at a higher rate in the initial years than in the subsequent years. A constant depreciation rate is applied to an asset’s book value each year, heading towards accelerated more, and the Production-based method. The amount of depreciation determined will be charged as depreciation in the Statement of Profit & Loss for that period. Also, the same will be reduced from the asset balance.

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