How to Use Excel's SYD Function

Every business needs to track depreciation on its assets, both for income tax and management purposes. The most common depreciation methods are straight line and sum-of-the-years' depreciation, also known as SYD. Often a business owner uses one method for income tax and calculates both methods for management purposes. They often rely on Excel's SYD function to determine the sum-of-the-years' depreciation quickly.

Difficulty: Moderately Easy

Instructions

1. Obtain the information needed about the assets. This includes the original cost, estimated life of the asset in years, salvage value at the end of its life and which year you want the depreciation calculated for.

2. Open the Excel spreadsheet. List all the assets, one at a time, in Column A, starting with Row 3.

3. List the original cost of each item in Column B, the salvage value in Column C, and the estimated life in Column D.

4. Deduct Column C (salvage value) from Column B (cost) and enter in Column E. This represents the total amount to depreciate.

5. Enter the following formula in Column F for year one: "=SYD(B3,C3,D3,1)." Press "Enter." Excel calculates the SYD for year one and enters it in the respective cell.

6. Repeat the same formula for year two in Column G, except change the numeral "1" to a "2." This gives the depreciation for year two. Continue this process for the number of years involved.

7. Add the columns to obtain the totals for each year for all your assets. To double check your work, add the totals for all the years and compare with the total in Column E.