Excel is the most widely used tool for dealing with massive datasets. We can perform myriads of tasks of multiple dimensions in Excel. In this article, I will show you how to calculate depreciation in Excel.

**Table of Contents**hide

## Introduction to Depreciation

Depreciation is a measure of how much the value of an asset decreases over time. A business or individual may buy an asset, for example, a vehicle, a computer, or another piece of equipment, and then work out the value of that asset over a period of time using depreciation, for accurate reflections on accounting budgets.

## How to Calculate Depreciation in Excel: 5 Easy Methods

This is the dataset for todayâ€™s article. We have the initial cost, salvage value, and useful life of an instrument. I will use this data to calculate depreciation in Excel.

### 1. Apply SLN Function to Calculate Depreciation

The first method is to apply **the SLN function**. This determines the single-line depreciation. To do so,

**Steps:**

- Go to
**C7**and write down the following formula

`=SLN(C4,C5,C6)`

- Then, press
**ENTER**to get the output.

### 2. Use SYD Function to Calculate Depreciation

**Assets do not depreciate linearly over time**. The number of depreciation changes every year. To consider this fact, Excel has the built-in **SYD function** to calculate depreciation.

**Steps:**

- Go to
**C8**and write down the following formula

`=SYD(C4,C5,C6,C7)`

- Then, press
**ENTER**to get the output.

**Explanation:**

- The amount of depreciation for the
**3rd**year is**$5,833.33**. The amount of depreciation will change if you change the**per**argument. - The accumulated depreciation after
**8**years will be**$(50,000-15,000)**or $**35,000**. - Using the formula, you will get the amount of depreciation from the 1st to 8th year. The values are
**$7,777.78 , $6,805.56 , $5,833.33 , $4,861.11, $3,888.89, $2,916.67, $1,944.44, $972.22**respectively. The sum of these values will be**$35,000**.

### 3. Apply DDB Function to Calculate Depreciation

The next method is the use of the** DDB function**. This function will calculate depreciation using the double-declining method.

**Steps:**

- First of all, go to
**C8**and write down the following formula.

`=DDB(C4,C5,C6,C7)`

- Then, press
**ENTER**to get the output.

### 4. Use the DB Function to Calculate Depreciation

The next method is the use of the **DB function**. This function will calculate the depreciation using the declining balance method.

**Steps:**

- First of all, go to
**C8**and write the following formula

`=DB(C4,C5,C6,C7,C8)`

- Then, press
**ENTER**to get the output.

**Note:**

The **month** argument indicates the number of the month in 1st year. In this case, it is **10**. That means, Excel will consider ** 10 months for the 1st year** while calculating depreciation.

### 5. Apply VDB Function to Calculate Depreciation

Now, I will explain another method to calculate depreciation. This time, I will use the **VDB function** to do so. This function will determine the depreciation of an instrument for a ** specific time span**. In this case, the time span will be

**48th**to

**52nd**month.

**Steps:**

- Go to
**C10**and write down the formula

`=VDB(C4,C5,C6,C7,C8,C9,TRUE)`

- Then, press
**ENTER**to get the output.

**Explanation:**

- Since we are calculating the depreciation from the
**48th**to the**52nd**month, the useful life is converted to the**month**. - The
**Factor**defines that the rate at which the balance declines is**5**. - The
**No_switch**is used to determine the nature of the depreciation method. If the value is**TRUE**, Excel will not switch to a straight-line depreciation method.

## Things to Remember

- Assets do not depreciate linearly.
- If not mentioned, Excel will consider
**Factor****2**.

**Download Practice Workbook**

Download this workbook and practice while going through the article.

## Conclusion

In this article, I have explained how to calculate depreciation in Excel. I hope it helps everyone. If you have any suggestions, ideas, or feedback, please feel free to comment below.