How to Calculate Sum-of-Years' Digits Depreciation With Excel

The SYD function in Excel calculates an asset's sum-of-years' depreciation over a specified period. This calculation is based on the original cost of the asset, the salvage value of the asset, the number of periods that the asset will be depreciated and the period to calculate the depreciation for. The following steps explain how to use the SYD function in Excel.

Difficulty: Moderate

Instructions

1. Learn how the sum-of-years' digits depreciation is calculated. SYD uses the following formula: SYD = (cost - salvage) * (life - per + 1) * 2 /((life) * (life + 1)).

2. Launch Excel and position the cursor over the cell you want to calculate the sum-of-years' digits depreciation in. That cell will now have a bold black outline indicating it has been selected.

3. Enter "=syd(" into the cell. A tip will appear that reads "SYD(cost,salvage,life,per)." This indicates the syntax for the SYD function. The parameter that Excel is expecting you to input next will be in bold.

4. Provide the cost of the asset, the salvage value, the lifespan and the period to calculate the depreciated for. Ensure that the cost of the asset and the salvage value are in the same units of currency. The lifespan and period must also be in the same units of time.

5. Use some examples of SYD to calculate the sum-of-years' digits depreciation. =SYD(30,000,7500,10,1) determines the depreciation on an asset valued at $30,000 with a salvage value of $7,500 and a ten-year lifespan to be $4,090.91 for the first year.

Resources

• Learn more about using Excel