Hard copy is hard copy.You can read it , experiment it , prepare notes and lot. So why read online samples when you can own a full copy for less than 4$ .Email [email protected]  to buy hard copy of the same. If you think the excel book can be improved please email the author at [email protected]
 

Home

How do we calculate depreciation using ‘sum of year digit’?

Sum of year digits is a form of accelerated depreciation. Using this methodology we have greater depreciation in the earlier years and less in the later years. Below is a simple sample which shows the cost of asset, life and the salvage value. For the same we will try to calculate depreciation using ‘sum of year digit’.

Table: - Sample example

So below are the steps to calculate depreciation using ‘sum of year digit’.

• The first thing we do is total the number of year using life of the asset. As shown above the total number of years is five so the total is 1 + 2 + 3 + 4 + 5 = 15.
• To calculate depreciation for the any year we subtract the salvage value from the cost of asset and multiply it by a factor which varies depending on which year it is.

To calculate factor below is the formula.

Currently the total of the number of years is 15 (1+2+3+4+5).  So below is the calculation of factor for five years. 1^st year factor is (5/15=0.33), 2^nd year factor is (4/15=0.26), 3^rd  year factor is (3/15=0.2) and so on. In order to calculate depreciation we need to multiply this factor to the difference between cost of asset and salvage value. So below table shows a detail calculation for the same.

Table: - Depreciation calculation using sum of year

Figure: - SYD in action

Hard copy is hard copy.You can read it , experiment it , prepare notes and lot. So why read online samples when you can own a full copy for less than 4$ .Email [email protected]  to buy hard copy of the same. If you think the excel book can be improved please email the author at [email protected]
 

Home