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How to Calculate Depreciation In excel - 5 Functions to Calculate it

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Duration: 18:08
Submitted: 1 month ago
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Description:

In this video, we will learn five different depreciation functions in excel. These are the SLN Function, SYD Function, DB Function, DDB Function, and VDB function.

Table of Content;

00:00 INTRODUCTION

01:16 SLN Function in Excel

04:19 SYD Function in Excel

08:05 DB Function in Excel

11:20 DDB Function in Excel

13:32 VDB Function in Excel

17:40 conclusion

SLN Function in Excel

The SLN function is the straight-line depreciation function. This function calculates the depreciation of an asset for each period. The syntax for this function is as follows:

=SLN(cost,salvage,life)

Where;

Cost: The initial cost of the asset

Salvage: The salvage value of the asset at the end of its life

life: The number of periods over which the asset is depreciated

The straight-line depreciation function is the simplest and most common method used to calculate depreciation. To use this function, you need to know the initial cost, salvage value, and useful life of the asset.

SYD Function in Excel

The SYD function is the sum-of-years' digits depreciation function. This function calculates the depreciation of an asset for each period. The SYD function is a more complex depreciation function than the SLN function. The syntax for this function is as follows:

=SYD(cost,salvage,life,per)

Where;

Cost: The initial cost of the asset

Salvage: The salvage value of the asset at the end of its life

Life: The number of periods over which the asset is depreciated

Per: The period for which you want to calculate the depreciation.

The sum-of-years' digits depreciation function is a more complex depreciation function than the straight-line method. To use this function, you need to know the initial cost, salvage value, useful life, and period.

DB Function in Excel

The DB function is the declining balance depreciation function. This function calculates the depreciation of an asset for each period. The DB function is a more complex depreciation function than the SLN and SYD functions. The syntax for this function is as follows:

=DB(cost,salvage,life,period,month)

Where;

Cost: The initial cost of the asset

Salvage: The salvage value of the asset at the end of its life

Life: The number of periods over which the asset is depreciated

Period: The period for which you want to calculate the depreciation.

Month: The number of months in the first year.

The declining balance depreciation function is a more complex depreciation function than the straight-line method and sum-of-years' digits method. To use this function, you need to know the initial cost, salvage value, useful life, period, and month.

DDB Function in Excel

The DDB function is the double-declining balance depreciation function. This function calculates the depreciation of an asset for each period. The DDB function is a more complex depreciation function than the SLN, SYD, and DB functions. The syntax for this function is as follows:

=DDB(cost,salvage,life,period,[factor])

Where;

Cost: The initial cost of the asset

Salvage: The salvage value of the asset at the end of its life

Life: The number of periods over which the asset is depreciated

Period: The period for which you want to calculate the depreciation.

Factor: The rate at which the balance declines.

The double-declining balance depreciation function is a more complex depreciation function than the straight-line method, sum-of-years' digits method, and declining balance method. To use this function, you need to know the initial cost, salvage value, useful life, period, and factor.

VDB Function in Excel

The VBD function is the variable declining balance depreciation function. This function calculates the depreciation of an asset for each period. The VDB function is a more complex depreciation function than the SLN, SYD, DB, and DDB functions. The syntax for this function is as follows:

=VDB(cost,salvage,life,start_period,end_period,[factor],[no_switch])

Where;

Cost: The initial cost of the asset

Salvage: The salvage value of the asset at the end of its life

Life: The number of periods over which the asset is depreciated

Start_period: The period for which you want to start calculating the depreciation.

End_period: The period for which you want to stop calculating the depreciation.

Factor: The rate at which the balance declines.

No_switch: A logical value that specifies whether to switch from declining balance to straight-line when depreciation is greater than the SLN Depreciation.

The variable declining balance depreciation function is a more complex depreciation function than the straight-line method, sum-of-years' digits method, declining balance method

Conclusion

These are five different depreciation functions in excel that you can use to calculate the depreciation of an asset over time. Each function has its own syntax and uses different parameters. You should choose the depreciation function that best suits your needs. Thanks for watching!