The Excel SYD Function

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Sum-of-Years' Digits Depreciation

When calculating the depreciation of an asset, it is common to use an accelerated depreciation calculation, in which the calculated value of an asset is reduced by a larger amount during the first period of its lifetime, and smaller amounts during subsequent periods.

One popular accelerated depreciation method is the sum-of-years' digits depreciation method, which calculates depreciation using the following equation:

where,

cost = initial cost of the asset (at start of period 1)
salvage = final value of the asset at the end of its lifetime
life = number of periods over which the depreciation occurs
per = the period for which the depreciation is being calculated

Basic Description

The Excel SYD function calculates the sum-of-years' digits depreciation for a specified period in the lifetime of an asset.

The format of the function is :

SYD( cost, salvage, life, per )

where the arguments are as shown in the table below:

cost	-	The initial cost of the asset
salvage	-	The value of the asset at the end of the depreciation
life	-	The number of periods over which the asset is to be depreciated
per	-	The period number for which you want to calculate the depreciation

SYD Function Example

In the example below, the SYD function uses the sum-of-years' digits depreciation method to calculate the yearly depreciation of an asset that cost $10,000 at the start of year 1, and has a salvage value of $1,000 after 5 years.

Formulas: