Depreciation is described as the continual lowering of a fixed asset’s reported cost until the asset’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.

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## Overview of Depreciation Methods

**Depreciation** is described as the continual lowering of a fixed asset’s reported cost until the asset’s value is zero or insignificant. We can estimate the value of any fixed asset’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 **asset’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 **asset’s residual cost**, and the **total production unit of the asset’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 **asset’s residual cost** and the **lifespan of that asset**. The mathematical formula of this method is,

## 3 Easy Methods to Create Fixed Asset Depreciation Calculator in Excel

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**.

**📚 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 asset’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:

**📌 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: ****How to Use SLM Method of Depreciation Formula 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:

**📌 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:** **Units of Production Depreciation Method with Formula in Excel**

**Similar Readings**

**Calculate Sum of Years Digits Depreciation with Formula in Excel****How to Create Rental Property Depreciation Calculator in Excel****Create Vehicle Depreciation Calculator in Excel****How to Apply Declining Balance Depreciation Formula 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.

**📌 Steps:**

- Firstly, select cell
**C13**. - Next, write down the following formula in the cell. In the first year, we don’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.

**Read More:** **How to Calculate Double Declining Depreciation in Excel**

## Conclusion

That’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.

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