Excel Straight Line Depreciation Formula

What this does

SLN spreads an asset's cost evenly across its useful life. It is the simplest depreciation method and the default in most accounting policies for assets that lose value steadily — furniture, fittings, buildings. Because the charge is identical every period, one formula covers the whole schedule with no period argument at all. That simplicity is also its limitation: assets that lose most of their value early, such as vehicles and computers, are better matched by a declining-balance method like DB or DDB. Keep the inputs visible and clearly labelled and the whole thing stays auditable — anyone who opens the file later, including you, can see at a glance exactly what feeds the result and change one assumption without hunting through the formula. The difference between a quick fix and a sheet you can trust is the extra minute you spend validating “excel straight line depreciation formula”. Start on a copy or a tiny sample, keep the affected formula visible, and compare the result with the tool above before you touch the real workbook. When a formula is involved, keep the inputs labelled beside it, reference cells instead of typing values, and apply number formatting only after the result checks out. The point is a calculation you can defend to a CFO or an auditor, but the practical win is that someone else can open the file and understand what happened without asking you.

A worked example

A machine costing 60,000 with a 6,000 residual over 8 years: =SLN(60000, 6000, 8) returns 6,750 every year. Over the full life those charges total 54,000, bringing the book value from 60,000 down to exactly the 6,000 salvage figure. SLN is the depreciation method most policies default to, and its constant charge makes an asset schedule trivial to build. One habit worth forming early: name the cells that hold your inputs, so the formula reads in plain language instead of a string of cell addresses. A reviewer — or you in three months — can then follow the logic without decoding what B7 and D2 were supposed to mean, which is most of what makes a sheet maintainable.

In Google Sheets

If you are in Google Sheets rather than Excel, the good news is that the formula shown here is identical and the workflow barely changes — menus sit across the top instead of in a ribbon, and a few function names differ slightly, but anything you build here moves across with little or no rework. The aim was to get you unstuck fast and leave you a little more capable than a copy-paste would. The answer is at the top, the tool proves it, and the detail above shows why it holds — so the next time a colleague asks, you can answer without reaching for search. Here is the takeaway for “excel straight line depreciation formula”: copy the answer if you are busy, but if you have a spare few minutes, rebuild the example in Excel yourself with the tool above open beside it. That single pass — type it, run it, watch the result move when you change an input — is what turns a formula you found into a technique you trust. Keep your inputs labelled and referenced, never hard-coded, and the same sheet stays correct and auditable as it grows. Done that way, you will not need to look this up again, and you will be the person others ask.

Common mistakes

• Omitting salvage value, which over-depreciates the asset to zero.
• Using straight-line for assets that genuinely lose most value early; DDB matches those far better.
• Mixing units — a monthly schedule needs the life expressed in months, not years.

Frequently asked questions