What is asset depreciation?
Depreciation spreads a fixed asset’s cost over its useful life. In accounting it reflects wear and obsolescence; for Guatemala taxpayers it can be a deductible ISR expense when you stay within statutory caps and keep proper acquisition records.
With the calculator defaults: cost 100,000, residual 10,000, life 5 years, straight-line: annual depreciation is 18,000 (monthly 1,500, rate 20%, depreciable basis 90,000). Under double declining balance, year 1 jumps to 40,000 (rate 40%).
Formulas
Annual depreciation = (Asset cost − Residual value) ÷ Useful life in years
Rate = 2 ÷ Useful life
Year’s depreciation = Book value × rate
(book value never falls below residual)
Default example (straight-line)
| Item | Value |
|---|---|
| Asset cost | 100,000.00 |
| Residual value | 10,000.00 |
| Depreciable amount | 90,000.00 |
| Useful life | 5 years |
| Annual depreciation | 18,000.00 |
| Monthly depreciation | 1,500.00 |
| Rate | 20% |
| Year | Depreciation | Accumulated | Book value |
|---|---|---|---|
| 1 | 18,000.00 | 18,000.00 | 82,000.00 |
| 2 | 18,000.00 | 36,000.00 | 64,000.00 |
| 3 | 18,000.00 | 54,000.00 | 46,000.00 |
| 4 | 18,000.00 | 72,000.00 | 28,000.00 |
| 5 | 18,000.00 | 90,000.00 | 10,000.00 |
Same asset: double declining balance
| Year | Depreciation | Accumulated | Book value |
|---|---|---|---|
| 1 | 40,000.00 | 40,000.00 | 60,000.00 |
| 2 | 24,000.00 | 64,000.00 | 36,000.00 |
| 3 | 14,400.00 | 78,400.00 | 21,600.00 |
| 4 | 8,640.00 | 87,040.00 | 12,960.00 |
| 5 | 2,960.00 | 90,000.00 | 10,000.00 |
Year 1 expense is more than 2× straight-line (40,000 vs 18,000). Useful for tech and fleets that lose value early. The 10,000 residual is honored at the end.
Typical straight-line scenarios
| Asset example | Cost / residual / years | Annual | Monthly | Rate |
|---|---|---|---|---|
| Machinery | 50,000 / 0 / 5 | 10,000.00 | 833.33 | 20% |
| Vehicle | 80,000 / 8,000 / 5 | 14,400.00 | 1,200.00 | 20% |
| Computer equipment | 15,000 / 0 / 3 | 5,000.00 | 416.67 | 33.33% |
| Building / structure | 250,000 / 25,000 / 20 | 11,250.00 | 937.50 | 5% |
Guatemala ISR reference maximum rates
These are common reference caps for fixed assets under income-tax rules. Confirm the current statute and your regime before filing.
| Asset type | Reference annual rate | Implied life (approx.) |
|---|---|---|
| Buildings & structures | 5% | ~20 years |
| Machinery & equipment | 20% | ~5 years |
| Vehicles | 20% | ~5 years |
| Office furniture & equipment | 20% | ~5 years |
| Computer equipment | 33.33% | ~3 years |
| Tools & accessories | 25% | ~4 years |
When to use each method
- Straight-line: even use (buildings, furniture, many machines). Easy to audit and match fixed statutory rates.
- Double declining: heavier early expense (tech, vehicles). Residual value caps the final years.
Related finance tools
- Model the tax impact with Guatemala income tax (ISR) and ISR/VAT withholding.
- If you finance the asset, compare cost with personal loan or auto loan.
- For real estate, separate book depreciation from IUSI property tax and capital gains.
- Project returns with ROI and compound interest.
- Labor cost of operators: Guatemala payroll.
This tool is educational. It does not replace the ISR law, SAT guidance, or a licensed accountant. Maximum rates can change by asset class, regime, and reforms. Keep invoices, in-service dates, and method notes in your fixed-asset register.
Frequently asked questions
Under straight-line, annual depreciation is 18,000 (monthly 1,500, rate 20%, depreciable basis 90,000). Those are this calculator's default values.
It is the systematic allocation of a fixed asset's cost over its useful life, reflecting wear or obsolescence. It can be an ISR-deductible expense when caps and documentation are met.
The most common are straight-line (even expense each year) and double declining balance (higher early expense). Both honor residual value at the end of useful life.
Common ISR references: buildings 5%, machinery 20%, vehicles 20%, furniture 20%, computer equipment 33.33%, tools 25%. Confirm the current statute and your regime before filing.
It can reduce taxable income if deductible under your regime. Treat this tool as an estimate and validate with an accountant or SAT before filing.
Sources and limits
- Guatemala income-tax rules on fixed-asset depreciation (verify current text).
- Method and residual should stay consistent in books and returns.
- Does not model revaluations, impairments, or special lease rules.