How to Calculate Straight-Line Depreciation Using Microsoft Excel

By eHow Computers Editor

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Microsoft Excel has many useful functions that make a person or business more productive. One such function is the calculation of straight-line depreciation. Basic accounting knowledge and a working knowledge of Microsoft Excel are all that it takes to make this calculation a snap.

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Instructions

Difficulty: Moderate

Step1

Determine the cost of the asset acquisition. This is the purchase price of the asset.

Step2

Ascertain the useful life of the asset. Please consult with the generally accepted accounting principles (GAAP) to determine the asset's useful life.

Step3

Establish the salvage value of the asset. Again, consult with the generally accepted accounting principles for guideline to determine the salvage value of an asset.

Step4

Open the Microsoft Excel spreadsheet program.

Step5

Enter the value obtained from Steps One, Two, and Three. Type each value into its own column and label each column appropriately.

Step6

Select the function utility from the individual cell display menu. Make sure the cell where the straight-line depreciation figure resides is chosen.

Step7

Choose the "IF" function from the list of available functions. Be sure that the display option is set to "All" or "Logical". Alternatively, a user can simply type "If" into the function search option.

Step8

Enter the cell numbers for the values that were previously entered. Assume the following is true and these cell numbers are where the depreciation values were entered: I6 = acquisition cost, J6 = useful life, K6 = salvage value. In the Logical_test box enter the following, "AND(I6<>0,K6<>0,J6<>0)." In the "Value_if_true" box enter the following, "SLN(I6,K6,J6)." And finally in the "Value_if_false" box enter double quotations or "".

Step9

Click "OK" and the straight-line depreciation figure will appear in the designated cell. Choose "Save" when the work in Excel is complete.