Depreciation — Excel guide
Spreading an asset's cost over its life. Every method writes off the same total (cost − salvage) — they differ only in TIMING, and timing is the economics.
SLN
Straight-line: the same amount every year.
- Monthly models: SLN(...)/12 is exact — straight-line is linear.
- Book value at any point = cost − accumulated depreciation. It ends at salvage regardless of market price.
- Bought mid-year? Prorate year one (months/12) or apply your policy's half-year convention.
DDB
Double-declining balance: big early, shrinking each year.
- Salvage isn't in the yearly math — it's a FLOOR the book value won't cross.
- SYD (sum-of-years' digits) is the gentler accelerated method: year 1 of 5 takes 5/15 of the base.
- Front-loading matches assets that lose value fastest new — and defers taxes.
VDB
Declining balance that auto-switches to straight-line — how real schedules run.
- Fractional start/end periods handle mid-year purchases natively.
- Units-of-production has no built-in: (cost - salvage) × units ÷ lifetime units.
- Book vs tax showing different numbers is NORMAL — books use management's method, tax follows statutory schedules (MACRS); the gap creates deferred taxes.