Depreciation is described as the continual lowering of a fixed assetâ€™s reported cost until the assetâ€™s value is zero or insignificant. We can easily design a simple fixed asset depreciation calculator using Microsoft Excel. In this article, we are going to demonstrate 3 basic methods to create a fixed asset depreciation calculator in Excel. If you are also curious about it, download our practice workbook and follow us.

**Table of Contents**Expand

## Overview of Depreciation Methods

**Depreciation** is described as the continual lowering of a fixed assetâ€™s reported cost until the assetâ€™s value is zero or insignificant. We can estimate the value of any fixed assetâ€™s depreciation value using three methods.

- Straight-Line Method
- Unit of Production Method
- Double Declining Balance Method

**Straight-Line Method:** The most straightforward depreciation calculation method is the straight-line method. In this method, the depreciation value is the ratio of the difference between the **fixed asset cost** and the **assetâ€™s residual cost**, and the **lifespan of that asset**. Thus, we can show the mathematical expression as,

**Unit of Production Method:** In this case, the depreciation value is the multiplication value of the **yearly production unit** and the ratio of the difference between the **fixed asset cost** and the **assetâ€™s residual cost**, and the **total production unit of the assetâ€™s lifespan**. The formula can be shown below:

**Double Declining Balance Method:** According to this method, the depreciation value is the ratio of **2** times the difference between the **fixed asset cost** and the **assetâ€™s residual cost** and the **lifespan of that asset**. The mathematical formula of this method is,

To demonstrate the methods, we consider a dataset of a sample asset. The **cost of that fixed asset** is $10,000,000. Its **lifespan** is 15 years, and after 15 years, its **residual cost** will be $10,000.

**ðŸ“š Note:**

All the operations of this article are accomplished by using **Microsoft Office 365** application.

## 1. Using Straight-Line Method

In the first method, we are going to use the **Straight-Line** method to create a fixed asset depreciation calculator in Excel. Our fixed assetâ€™s specification is in the range of cells **C5:C8**. We will display the depreciation value in cell **C10**.

The steps of this approach are given below:

**ðŸ“Œ Steps:**

- First of all, select cell
**C10**. - Now, write down the following formula in the cell.

`=(C5-C7)/C6`

- Press
**Enter**.

- You will get depreciation value.

Thus, we can say that our formula works perfectly, and we are able to create a fixed asset **depreciation calculation** by the **Straight-Line** method.

**Read More: **Create Depreciation Schedule in Excel

## 2. Applying Unit of Production Method

In this method, we will estimate the depreciation value by the **Unit of Production** method. Besides the previous specifications, to follow this project, we need the approximate **amount of production** for the first and second years. Both values are shown in the range of cells **C9:C10**. We will display the results in the range of cells **C13:D13**.

The steps of this process are given as follows:

**ðŸ“Œ Steps:**

- First, select cell
**C13**. - After that, write down the following formula in the cell.

`=((C5-C7)/C8)*C9`

- Then, press
**Enter**.

- You will get the depreciation value which will reduce after passing the first year.
- Similarly, select cell
**D13**. - Afterward, write down the following formula inside the cell.

`=((C5-C7)/C8)*C10`

- Again, press
**Enter**.

- In this way, you will be able to calculate the depreciation value for each year.

Hence, we can say that both formulas work effectively, and we are able to create a fixed asset depreciation calculation by the **Unit of Production** method.

**Read More: **How to Create Vehicle Depreciation Calculator in Excel

## 3. Utilizing Double Declining Balance Method

In the last method, we are going to use the **Double Declining Balance** method to design a fixed asset depreciation calculator in Excel. We will use our previous dataset to demonstrate this process. The result will be in the range of cells **C13:D13**.

The procedure of the method is explained below step-by-step.

**ðŸ“Œ Steps:**

- Firstly, select cell
**C13**. - Next, write down the following formula in the cell. In the first year, we donâ€™t have any depreciation value for the last year. Hence, the value of the
**Accumulated Depreciation**will be**zero****(0)**.

`=(2*(C5-0))/C6`

- Now, press
**Enter**.

- Again, select cell
**D13**and write down the following formula in the cell. Here, the value of the**Accumulated Depreciation**will be the value of the depreciation value of the**first**year.

`=(2*(C5-C11))/C6`

- Similarly, press
**Enter**.

- You will be able to determine the depreciation value for each year.

Finally, we can say that both formulas work successfully, and we are able to create a fixed asset depreciation calculation by the **Double Declining Balance** method.

**Download Practice Workbook**

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## Conclusion

Thatâ€™s the end of this article. I hope that this article will be helpful for you and you will be able to create a fixed asset depreciation calculator in Excel. Please share any further queries or recommendations with us in the comments section below if you have any further questions or recommendations.

Keep learning new methods and keep growing!

**Related Articles**

- How to Create Monthly Depreciation Schedule in Excel
- How to Create Rental Property Depreciation Calculator in Excel

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