The Depreciable Value Formula, also known as the Cost-to-Depreciation Ratio (CDR), is a core concept used to calculate how much of an asset’s value you can deduct from your taxes each year. This formula works by dividing the cost of an asset by its useful life and allowing businesses to write off a portion of that expense each year. In other words, it helps businesses plan for future costs while optimizing their current tax liabilities. By understanding the Depreciable Value Formula, businesses can more accurately budget for the future and reduce the amount of taxes they pay on their assets.