Depreciation
Free Depreciation: use =SLN(Cost, Salvage, Life) for an equal yearly charge, or =DDB(Cost, Salvage, Life, Period) for an accelerated one.
Straight-line · 5 years
| Year | Depreciation | Book value |
|---|---|---|
| 1 | €1,600.00 | €8,400.00 |
| 2 | €1,600.00 | €6,800.00 |
| 3 | €1,600.00 | €5,200.00 |
| 4 | €1,600.00 | €3,600.00 |
| 5 | €1,600.00 | €2,000.00 |
Need it as an auditable file?
This schedule ships inside the Corporate Finance Suite — formula-driven, unlocked, audit-ready.
How it works
In Excel or Google Sheets, use =SLN(Cost, Salvage, Life) for an equal yearly charge, or =DDB(Cost, Salvage, Life, Period) for an accelerated one.
Put the asset cost, salvage (residual) value and useful life in labelled cells.
For a level charge, type =SLN(Cost, Salvage, Life).
For an accelerated charge, type =DDB(Cost, Salvage, Life, Period) and copy it down one row per year.
Subtract the running depreciation from cost to track book value each year.
What this does
Depreciation spreads the cost of an asset across the years it is used, so each period carries a fair share of the expense instead of one big hit at purchase. Straight-line (SLN) charges the same amount every year; declining-balance (DDB) front-loads the expense, matching assets that lose most value early, like vehicles and laptops.
A worked example
A €10,000 machine with a €2,000 salvage value and a 5-year life depreciates by =SLN(10000,2000,5) = €1,600 every year under straight-line. Switch to declining balance and the first-year charge is larger — €4,000 — then tapers. The table and book-value curve above redraw the whole schedule as you change any input. You need a depreciation schedule for any fixed-asset register, a capex budget, or a P&L that has to match expense to the period that benefited. It is core to both management reporting and tax compliance.
Common mistakes
- Forgetting the salvage value, which over-depreciates the asset below its real residual worth.
- Mixing methods within one schedule, so the totals no longer reconcile.
- Using
DDBwithout a period argument that increments each year. - Confusing accounting depreciation with the tax schedule your jurisdiction actually requires.
FAQ
Straight-line or declining balance?
Straight-line suits assets that wear evenly (furniture, buildings). Declining balance fits assets that lose value fast early on (tech, vehicles). Tax rules may mandate one.
What is salvage value?
The amount you expect to recover at the end of the asset’s life — scrap or resale value. Depreciation only writes the asset down to this floor, never below.
Does Google Sheets have SLN and DDB?
Yes, both functions exist in Google Sheets with identical arguments, so the formulas here move across without change.