Short answer: record each group of machines at its cost, pick a useful life and a salvage value, and spread the cost minus salvage evenly over that life. Each month, debit depreciation expense and credit accumulated depreciation. When machines are sold or scrapped, take their cost and accumulated depreciation off the books and record the gain or loss. The useful life and the tax method are calls for you and your accountant.
1. Work out what each machine cost
Start with the purchase price. Costs you paid to get the machine running are usually added to it, such as shipping, import duties and installation. Running costs, such as power and hosting fees, are not part of the machine's cost. They are monthly expenses. Ask your accountant where to draw the line for your business, then apply it the same way every time.
Record machines in groups that share a model, a site, a purchase date and a cost. Twenty S21 machines bought together for one site are one group. A group is easier to track than single machines, and it is the level you compare machines at.
2. Choose a useful life
The useful life is how long you expect a machine to earn. Large public miners disclose the life they use in their filings, and three years is common:
- Riot Platforms says its miners "are depreciated over an estimated useful life of three years" (Q2 2026 results).
- CleanSpark estimates "the useful lives of our miners to be three years" and depreciates them on a straight-line basis (Form 10-Q for the quarter ended June 30, 2026).
- Cipher Mining depreciates its mining machines on a straight-line basis over a useful life that is "generally three years" (Form 10-Q for the quarter ended June 30, 2026).
Those are their estimates for their fleets, not a rule. Older models, used machines or a plan to run machines longer at cheap power can all point to a different life. Agree it with your accountant and write down why.
3. Calculate the monthly charge
Straight-line depreciation spreads the cost evenly:
Monthly depreciation = (cost minus salvage value) divided by useful life in months
Salvage value is what you expect to get for the machines at the end of their life. Zero is the simple, cautious choice, because resale prices for old models are hard to predict. If you do expect a resale value, use a conservative figure.
Example. You buy 20 machines for $3,000 each, $60,000 in total, and put them into service in March. You use a 36-month life and no salvage value. The monthly charge is $60,000 divided by 36, which is $1,666.67. Depreciation starts in the month the machines start running, not the month you paid for them.
4. Book the monthly journal entry
Each month, for each group or as one total for the fleet:
- Debit Depreciation expense $1,666.67
- Credit Accumulated depreciation $1,666.67
Accumulated depreciation is a contra asset account that sits under your mining equipment. Cost minus accumulated depreciation is the machines' book value. If you track sites in QuickBooks with classes or locations, tag each group's entry with its site so profit by site includes it.
5. Keep a fleet register
A fleet register is the list behind the entries. For each group keep:
- model and site
- number of units
- total cost
- in-service date
- useful life and salvage value
- depreciation to date and book value
- any units sold, scrapped or moved, with dates
The register is what your accountant checks the entries against. Update it when machines change, before you close the month.
6. Handle sales and scrapped machines
When machines leave the fleet, remove their cost and their accumulated depreciation, and record any cash received. The difference is a gain or a loss.
Example. After 24 months you sell 5 of the 20 machines for $2,000 in total. Their cost was $15,000. Their depreciation to date is $15,000 divided by 36, times 24, which is $10,000. Book value is $5,000, so the sale is a $3,000 loss:
- Debit Cash $2,000
- Debit Accumulated depreciation $10,000
- Debit Loss on disposal $3,000
- Credit Mining equipment $15,000
From the next month, the group's charge drops to cover the 15 machines left. A machine you scrap is the same entry with no cash. Machines that break down but stay on site are still in the fleet until you decide to sell or scrap them.
7. Put depreciation into your break-even
Break-even per Bitcoin is a site's costs for the month divided by the Bitcoin it produced. It is worth looking at in three layers:
- Energy: power only.
- Site cash: everything you pay to run the site.
- Fully loaded: site cash costs plus depreciation.
The layers answer different questions. Riot notes that it does not consider depreciation expense when deciding whether it is economical to operate its miners (Q2 2026 results). Whether to switch a machine off this month is a cash question. Whether a site earns back what you paid for its machines is a fully loaded question.
With the example above, a site with $25,000 of cash costs that produced 0.5 BTC has a site cash break-even of $50,000 per BTC. Add the $1,666.67 of depreciation and the fully loaded break-even is $53,333 per BTC. Want a starting point for your own costs? Try the free mining cost benchmark.
Book depreciation and tax depreciation
Everything above is book depreciation, for your own accounts and anyone who reads them. Tax depreciation follows separate rules and can give a very different schedule for the same machines. Which rules apply, and how to classify ASICs for tax, is a call for your accountant.
Doing it every month with Flash
Flash keeps the fleet register for you: you record machine groups by model and site, with units, cost, in-service date and useful life, and disposals as machines leave. Flash runs straight-line book depreciation from that register and builds the monthly journal entry for you to review before it posts to QuickBooks.
Depreciation also flows into the numbers per site: Flash shows break-even for every site and machine group on energy alone, on site cash costs and fully loaded with depreciation. Closed months are locked, and any later change is recorded as a correction, so your accountant can trace each entry back to the register. See Flash for miners.
Questions
What useful life should I use for ASIC miners?
Many large public miners use three years, including Riot Platforms, CleanSpark and Cipher Mining. Your fleet may differ, so agree the useful life with your accountant and record why.
How do I calculate monthly depreciation for a miner?
Take the cost minus the expected salvage value and divide it by the useful life in months. Twenty machines costing $60,000 in total over 36 months with no salvage value come to $1,666.67 a month.
What is the journal entry for ASIC depreciation?
Debit depreciation expense and credit accumulated depreciation for the month's charge. Tag the entry with the site if you track profit by site.
How do I record selling or scrapping a miner?
Remove the machine's cost and its accumulated depreciation, record any cash received, and book the difference as a gain or a loss on disposal.
Is book depreciation the same as tax depreciation?
No. Tax depreciation follows separate rules and can give a different schedule for the same machines. Your accountant decides which rules apply.
Should depreciation be part of my break-even price?
Look at both. Cash break-even tells you whether running a machine this month pays. Fully loaded break-even, with depreciation, tells you whether a site earns back what its machines cost.
Flash brings pool exports, exchange deposits, your costs and your fleet register together into per-site books and a reviewable QuickBooks close. See Flash for miners.