Microsoft Office Tutorials and References
In Depth Information
Depreciation Calculations
Table 12-1 summarizes Excel’s depreciation functions and the arguments used by each. For
complete details, consult Excel’s Help system.
Table 12-1: Excel Depreciation Functions
Function
Depreciation Method
Arguments*
SLN
Straight-line. The asset depreciates by the same amount each year
of its life.
cost, salvage, life
DB
Declining balance. Computes depreciation at a fixed rate.
cost, salvage, life,
period, [month]
DDB
Double-declining balance. Computes depreciation at an
accelerated rate. Depreciation is highest in the first period and decreases
in successive periods.
cost, salvage, life,
period, month, [factor]
SYD
Sum of the year’s digits. Allocates a larger depreciation in the
earlier years of an asset’s life.
cost, salvage, life, period
VDB
Variable-declining balance. Computes the depreciation of an
asset for any period (including partial periods) using the
doubledeclining balance method or some other method you specify.
cost, salvage, life, start
period, end period,
[factor], [no switch]
*Arguments in brackets are optional.
The arguments for the depreciation functions are described as follows:
h cost: Original cost of the asset.
h salvage: Salvage cost of the asset after it has fully depreciated.
h life: Number of periods over which the asset will depreciate.
h period: Period in the life for which the calculation is being made.
h month: Number of months in the first year; if omitted, Excel uses 12.
h factor: Rate at which the balance declines; if omitted, it is assumed to be 2 (that is,
double-declining).
h rate: Interest rate per period. If you make payments monthly, for example, you must
divide the annual interest rate by 12.
h no switch: True or False. Specifies whether to switch to straight-line depreciation when
depreciation is greater than the declining balance calculation.
Figure 12-21 shows depreciation calculations using the SLN, DB, DDB, and SYD functions. The
asset’s original 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.
 
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