5 Excel Depreciation Functions You Need to Know: SLN, SYD, DB, DDB, VDB
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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.
Each of these functions has a specific use that you will want to be familiar with if you do any kind of accounting or financial analysis in Excel.
We'll go over what each function does and how to use it so that you can start incorporating depreciation into your own work.
1️⃣Let's learn the syntax of all these functions, first is the SLN function;
SLN(cost,salvage,life)
This function calculates the straight-line depreciation for a given asset over a specified number of periods. The cost is the initial purchase price of the asset, the salvage value is the estimated amount that the asset will be worth at the end of its useful life, and life is the number of periods over which the depreciation is to be calculated.
For example, if you have an asset that costs $2000 and will have a salvage value of $500 at the end of its life, you would use the following formula:
=SLN(2000,500,life)
This would give you a depreciation amount of $166.67 per year for the given asset.
2️⃣For second, lets learn the syntax of SYD Function;
SYD(cost,salvage,life)
This function calculates the depreciation for an asset using the sum of years' digits method. The cost is the initial purchase price of the asset, the salvage value is the estimated amount that the asset will be worth at the end of its useful life, and life is the number of periods over which the depreciation is to be calculated.
For example, if you have an asset that costs $2000 and will have a salvage value of $500 at the end of its life, you would use the following formula:
=SYD(2000,500,life)
This would give you a depreciation amount of $333.33 per year for the given asset.
3️⃣For third, lets learn the syntax of DB Function;
DB(cost,salvage,life)
This function calculates the depreciation for an asset using the double-declining balance method. The cost is the initial purchase price of the asset, the salvage value is the estimated amount that the asset will be worth at the end of its useful life, and life is the number of periods over which the depreciation is to be calculated.
For example, if you have an asset that costs $2000 and will have a salvage value of $500 at the end of its life, you would use the following formula:
=DB(2000,500,life)
This would give you a depreciation amount of $500 per year for the given asset.
4️⃣For fourth, lets learn the syntax of DDB Function;
DDB(cost, Salvage, life)
The DDB function calculates depreciation using the double-declining balance method with a constant rate. The cost is the initial purchase price of the asset, the salvage value is the estimated amount that the asset will be worth at the end of its useful life, and life is the number of periods over which the depreciation is to be calculated.
The rate parameter controls the speed at which depreciation occurs. A rate of 0 will cause depreciation to occur at a constant rate, while a rate of less than 0 will cause depreciation to occur at an accelerating rate.
For example, if you have an asset that costs $2000 and will have a salvage value of $500 at the end of its life, you would use the following formula:
=DDB(2000, 500, life)
This would give you a depreciation amount of $416.67 per year for the given asset.
5️⃣For fifth, lets learn the syntax of VDB Function;
VDB(cost, Salvage, life)
The VDB function calculates depreciation using the variable double-declining balance method. The cost is the initial purchase price of the asset, the salvage value is the estimated amount that the asset will be worth at the end of its useful life, and life is the number of periods over which the depreciation is to be calculated.
The rate parameter controls the speed at which depreciation occurs. A rate of 0 will cause depreciation to occur at a constant rate, while a rate of less than 0 will cause depreciation to occur at an accelerating rate.
For example, if you have an asset that costs $2000 and will have a salvage value of $500 at the end of its life, you would use the following formula:
=VDB(2000, 500, life)
This would give you a depreciation amount of $416.67 per year.
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
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