Microsoft Office Tutorials and References
In Depth Information
The SLN function
TABLE 16-2 Depreciation function arguments
Argument
Description
Initial cost of the asset
Cost
Length of time the asset will be depreciated
Life
Individual time period to be computed
Period
Asset’s remaining value after it has been fully depreciated
Salvage
The SLN function
The SLN function determines the straight-line depreciation for an asset for a single period.
This depreciation method assumes that the depreciation is uniform throughout the useful
life of the asset. The cost or basis of the asset, less its estimated salvage value, is deductible
in equal amounts over the life of the asset. This function takes the arguments cost , salvage ,
and life . (For definitions of these arguments, see Table 16-2.)
Suppose you want to determine the annual depreciation for a machine that costs \$8,000
new, has a life of 10 years, and has a salvage value of \$500. The formula =SLN(8000, 500,
10) tells you that each year’s straight-line depreciation is \$750.
The DDB and DB functions
The DDB (double declining balance) function computes an asset’s depreciation at an
accelerated rate—more in the early periods and less later. Using this method, depreciation is
computed as a percentage of the net book value of the asset (the cost of the asset less any
prior years’ depreciation).
The function takes the arguments cost , salvage , life , period , and factor . All DDB arguments
must be positive numbers, and you must use the same time units for life and period; that
is, if you express life in months, period must also be in months. The factor argument is
optional and has a default value of 2, which indicates the normal double declining balance
method. Using 3 for the factor argument specifies the triple declining balance method. For
other argument definitions, see Table 16-2.
Suppose you want to calculate the depreciation of a machine that costs \$5,000 new and
has a life of five years (60 months) and a salvage value of \$100. The formula =DDB(5000,
100, 60, 1) tells you that the double declining balance depreciation for the first month is
\$166.67. (Note that life is expressed in months.) The formula =DDB(5000, 100, 5, 1) tells you
that the double declining balance depreciation for the first year is \$2,000.00. (Note that life
is expressed in years.)
The DB (declining balance) function is similar to the DDB function except it uses the fixed
declining balance method of depreciation and can calculate depreciation for a particular     Search JabSto ::

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