Microsoft Office Tutorials and References

In Depth Information

Variable-declining balance. Computes the depreciation of

an asset for any period (including partial periods) using the

double-declining balance method or some other method you

specify.

cost, salvage, life,

start period, end

period, [factor], [no

switch]

VDB

* Arguments in brackets are optional.

The arguments for the depreciation functions are described as follows:

•
cost:
Original cost of the asset.

•
salvage:
Salvage cost of the asset after it has fully depreciated.

•
life:
Number of periods over which the asset will depreciate.

•
period:
Period in the life for which the calculation is being made. The VBD function uses two arguments:

start period
and
end period
.

•
month:
Number of months in the first year; if omitted, Excel uses 12.

•
factor:
Rate at which the balance declines; if omitted, it is assumed to be 2 (that is, double-declining).

•
no switch:
True or False. Specifies whether to switch to straight-line depreciation when depreciation is

greater than the declining balance calculation.

Figure 12-13 shows depreciation calculations using the SLN, DB, DDB, and SYD functions. The asset's origin-

al cost, $10,000, is assumed to have a useful life of ten years, with a salvage value of $1,000. The range labeled

Depreciation Amount shows the annual depreciation of the asset. The range labeled Value of Asset shows the

asset's depreciated value over its life.

Figure 12-14 shows a chart that graphs the asset's value. As you can see, the SLN function produces a straight

line; the other functions produce curved lines because the depreciation is greater in the earlier years of the as-

set's life.