Excel's Formula - sisman

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Part III: Financial Formulas
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 acceler- cost, salvage, life,
ated rate. Depreciation is highest in the first period and decreases
in successive periods.
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 cost, salvage, life, start
asset for any period (including partial periods) using the double- period, end period,
declining balance method or some other method you specify. [factor], [no switch]
*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.
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).
rate: Interest rate per period. If you make payments monthly, for example, you must
divide the annual interest rate by 12.
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.