# The Excel SYD Function

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.

## Function Description

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

The syntax of the function is:

SYD( cost, salvage, life, per )

where the function arguments are as follows:

 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 costs \$10,000 at the start of year 1, and has a salvage value of \$1,000 after 5 years.

Formulas:
A
1 Depreciation
2 =SYD( 10000, 1000, 5, 1 )
3 =SYD( 10000, 1000, 5, 2 )
4 =SYD( 10000, 1000, 5, 3 )
5 =SYD( 10000, 1000, 5, 4 )
6 =SYD( 10000, 1000, 5, 5 )
Results:
A B
1 Depreciation Asset Value At End Of Period
2 3000.00 - Value at end of Yr 1 is \$10,000 - \$3,000 = \$7,000
3 2400.00 - Value at end of Yr 2 is \$7,000 - \$2,400 = \$4,600
4 1800.00 - Value at end of Yr 3 is \$4,600 - \$1,800 = \$2,800
5 1200.00 - Value at end of Yr 4 is \$2,800 - \$1,200 = \$1,600
6 600.00 - Value at end of Yr 5 is \$1,600 - \$600 = \$1,000

As expected, subtracting the five yearly depreciation figures from the initial cost of \$10,000 gives the required salvage value of \$1,000.

Further examples of the Excel SYD function are provided on the Microsoft Office website.

## Excel SYD Function Errors

If you get an error from the Excel SYD Function, this is likely to be one of the following:

Common Errors
 #NUM! - Occurs if either: The supplied salvage argument is < 0; The supplied life or the supplied per argument is ≤ 0; The supplied per is greater than the supplied life argument. #VALUE! - Occurs if any of the supplied values are non-numeric.