Depreciation schedule calculator

Every method spreads the depreciable base, cost minus salvage value, over the asset’s life; they differ in timing.

Straight line:        (cost − salvage) / life
Declining balance:    book value × factor / life, never below salvage
Spreadsheet DB:       book value × (1 − (salvage/cost)^(1/life)), rate rounded to 3 decimals
Sum of years’ digits: (cost − salvage) × remaining life / (life(life + 1)/2)
Units of production:  (cost − salvage) × units this year / total units

Assumptions and limits

• Declining balance does not always reach salvage value by the end of the life; tick the switch to straight line to make it do so.
• Tax depreciation systems (for example MACRS, capital allowances or wear-and-tear tables) have their own rates and conventions and are not modelled.
• Accounting standards such as IAS 16 require the method to reflect how the asset’s benefits are consumed.
• An educational calculation, not financial, tax, legal or investment advice.

Worked example

Cost 30,000, salvage 7,500, 10 years: straight line gives 2,250 a year (spreadsheet SLN) and sum of the years’ digits gives 4,090.91 in year 1 and 409.09 in year 10 (SYD). Double declining 2,400 to 300 over 10 years gives 480 in year 1 and 22.12 in year 10 (DDB). Fixed-declining balance on 1,000,000 to 100,000 over 6 years starting in month 7 gives 186,083.33 then 259,639.42 (DB).

References

• Microsoft Excel: SLN function
• Microsoft Excel: DDB function
• Microsoft Excel: DB function
• Microsoft Excel: SYD function
• Microsoft Excel: VDB function
• IFRS Foundation: IAS 16 Property, Plant and Equipment