**Depreciation** is a very common term in the case of assets. In general, it is the decline of an asset over a certain period of time. There are many methods to calculate any asset’s depreciation. In this article, we will calculate the **sum of years’ digits depreciation** with formula in Excel. **Microsoft Excel **has introduced some wonderful techniques and formulas to calculate this. Therefore, we will learn to calculate the sum of years’ digits depreciation with formula in excel using **2** easy methods.

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## What Is Sum of Years Digits Depreciation?

The** sum of** **years**‘** digits** is one of the methods to calculate the depreciation of an asset. It is used to find the useful life of an asset in the first few years. It is also called the **SYD** method.

The** SYD **method gives a more accurate result than any other method of calculating depreciation. It is because the **SYD** method considers a larger amount of production capacity comparing earlier years and later days. The chosen method of depreciation only differentiates based on the timing of recognition.

The **SYD **method has an impact on cash flows, taxable income and income tax payments into later periods of time.

## Sum of Years Digits Depreciation Formula

The** Sum of years’ digits depreciation** can be calculated with two methods- **simple mathematical formula** and an **excel formula**. Both formulas are based on four arguments. They are:

**Cost:**The primary cost of an asset.**Salvage:**The value of the asset when the depreciation ends after a certain period. This value can be**Zero**(**0**) as well.**Life:**It is the availability of the asset measured as a period of time through which the asset’s value will depreciate.**Per:**The period of time for calculation.

Now, let us see both of the formulas based on these arguments.

**Mathematical Formula:**

`SYD=((cost-salvage)*(life-per+1)*2)/(life*(life+1))`

**Excel Formula:**

`=SYD(cost,salvage,life,per)`

## 2 Easy Methods of Calculating Sum of Years Digits Depreciation with Formula in Excel

As we know the formulas of the sum of years’ digits depreciation, let us follow the methods below to calculate it.

### 1. Apply SYD Function to Calculate Sum of Years Digits Depreciation

In this first method, we will apply **the SYD function** for the calculation sum of years’ digits depreciation. Let’s see how it works.

- First, insert the values of
**Cost**,**Salvage Value**and**Life**in the**Cell range C4:C6**.

- Then, insert the number of years in the
**Cell range B9:B14**titled as**Period**. It defined the length of time to calculate individual depreciation.

- Now, select
**Cell C9**and insert this formula.

`=SYD($C$4,$C$5,$C$6,B9)`

- In the following step, hit
**Enter**and you will get the depreciation value for the first year.

- Afterward, apply the
**AutoFill**tool and you will get all the depreciation values for each year.

- Lastly, apply this formula in
**Cell C15**.

`=SUM(C9:C14)`

- Finally, press
**Enter**and you will see the sum of years’ digits depreciation value.

Here, **the SUM function** calculates the total number of depreciation in the **Cell range C9:C14**.

**Read More: ****How to Create Fixed Asset Depreciation Calculator in Excel**

### 2. Find Sum of Years Digits Depreciation with Mathematical Formula

Another efficient way is to use the mathematical formula that we showed earlier in this article. With this formula, we can calculate the sum of years’ digits depreciation following the steps below.

- In the beginning, insert the same values of
**Cost**,**Salvage**and**Life**that we used in the first method. - Along with it, we are considering a similar time period in the
**Cell range B9:B14**.

- Now, select
**Cell C9**and type this formula in it.

`=(($C$4-$C$5)*($C$6-B9+1)*2)/($C$6*($C$6+1))`

- Then, press
**Enter**to get the first value of depreciation.

- After this, drag the
**Fill Handle**down up to**Cell C14**to get all the values for each period.

- Lastly, use this formula in
**Cell C15**to get the sum of years’ digits depreciation.

`=SUM(C9:C14)`

**Read More: ****How to Create Rental Property Depreciation Calculator in Excel**

## Things to Remember

- The unit of
**Life**and**Per**will always have to same, such as**days**,**months**, or**years**. - Make sure to avoid any non-numeric values, otherwise, it will show
**#VALUE!**error. - If
**Salvage**or**Per**values are equal or less than**Zero**(**0**), it will result in**#NUM!**error. - When
**Life < Per**, then it also causes**#NUM!**error.

## Conclusion

Henceforth, that is all for today’s article. I hope you will find the **2** easy methods useful to calculate the** sum of years’ digits depreciation **with formulas in excel. Let us know your insightful suggestions in the comment box. Follow **ExcelDemy** for more tutorials like this.

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