The sum of the years’ digits (SYD) depreciation method depreciates an asset more quickly during the beginning of its life. Unlike the straight-line method, depreciation expense is different for every depreciation period. Depreciation is greater in the early periods and declines in each successive period.
See a table comparing the different depreciation methods.
To return the value of one period of the sum of the years’ digits depreciation expense.
SLN – Straight-line depreciation
DB – Declining balance depreciation
DDB – Double declining balance depreciation
cost– The acquisition cost of the asset.
salvage– The amount you expect to receive in exchange for the asset at the end of its useful life. Typically, this is zero.
life– The number of periods you expect the asset to be in service. This unit can be months or years.
period– The period for which you are calculating depreciation expense. This must be in the same time unit as
life(months or years).
You purchase an automobile for 36,000, expect it to last three years, and trade it in for 3,000.
|3||$3,000||salvage||money back at the end of life|
|4||3||life||number of periods for the useful life|
|5||1||period||which period the expense is for|
|Depreciation expense for the first period||$16,500|
|Depreciation expense for the second period||$11,000|
|Depreciation expense for the final period||$5,500|
Next, let’s say you purchase a laptop computer for €3,000. You expect it to last 36 months and be worth €150 at the end of the two years.
|Depreciation expense for month 11||€111|
Live Example in Sheets
In addition to these examples, go to this spreadsheet for a live version of the SYD function.