Exploring Five Excel Built-In Depreciation Functions

Excel provides several built-in functions for different methods of calculating depreciation. Here are five types of depreciation functions you can use in Excel, along with examples for each:

Straight-Line Depreciation (SLN): This method spreads the depreciation evenly over the useful life of an asset.

Excel Formula: =SLN(Initial Cost, Salvage Value, Useful Life)

Double Declining Balance Depreciation (DDB): This method accelerates depreciation, with a higher expense in the earlier years.

Excel Formula: =DDB(Initial Cost, Salvage Value, Useful Life, Period)

Sum of Years' Digits Depreciation (SYD): This method assigns higher depreciation in the earlier years and reduces it over time.

Excel Formula: =SYD(Initial Cost, Salvage Value, Useful Life, Period)

Declining Balance Depreciation with Custom Factor (DB): This method allows you to specify a custom depreciation rate (expressed as a factor) for each period.

Excel Formula: =DB(Initial Cost, Salvage Value, Useful Life, Period)

VDB (Variable Declining Balance) Depreciation: This method allows for variable depreciation rates based on changing usage patterns.

Excel Formula: =VDB(Initial Cost, Salvage Value, Useful Life, Period, Factor)

Remember that each of these functions requires different parameters based on the method you're using. Adjust the values and parameters according to your specific depreciation scenario.

To use these functions, you can type them directly into Excel cells or use them within formulas to calculate depreciation for various assets or time periods.