Financial
Depreciation methods compared: Straight-Line (SLN), SYD, and Double-Declining
Calculate Year-1..N asset depreciation under Straight-Line, Sum-of-Years'-Digits, and salvage-capped Double-Declining Balance.
Even vs front-loaded asset depreciation schedules
For a $55,000 machine with a $5,000 salvage value ($50,000 depreciable base) and 5-year useful life: Straight-Line SLN(Cost, Salvage, Life) expenses $10,000 every year.
Sum-of-Years'-Digits (SYD) sums 1+2+3+4+5 = 15 (Life*(Life+1)/2) and expenses (Life - Period + 1)/15 of the depreciable base ($16,666.67 in Year 1). Double-Declining Balance applies 2/Life (40%) to Beginning Book Value—capped with MIN(BookVal - Salvage, BookVal * 2 / Life) so Book Value never drops below Salvage.
| Method ($55k cost, $5k salvage, 5 yr) | Year 1 Expense | Year 2 Expense |
|---|---|---|
| Straight-Line (SLN) | 10,000.00 | 10,000.00 |
| Sum-of-Years'-Digits (SYD) | 16,666.67 (5/15 * 50k) | 13,333.33 (4/15 * 50k) |
| Double-Declining (200% DB) | 22,000.00 (40% * 55k) | 13,200.00 (40% * 33k) |
Universal algebraic SYD, DDB, and SLN formulas
Writing SYD and salvage-floored DDB algebraically makes the depreciation cap explicit and uses ordinary spreadsheet arithmetic.
=ROUND((A2 - B2) * (C2 - D2 + 1) / (C2 * (C2 + 1) / 2), 2)Salvage-floored Year-1 Double-Declining Balance
MIN(BookVal - Salvage, ...) prevents over-depreciating past salvage value.
=ROUND(MIN(A2 - B2, A2 * (2 / C2)), 2)Inputs and interpretation
Require cost >= salvage >= 0, positive integer useful life and a period from 1 through that life. The DDB formula shown is first-year only and does not change with D2; later years use beginning book value. It does not switch automatically to straight-line or force a final write-off. Rounding may require a final schedule adjustment. These are mathematical examples, not a prescribed tax or accounting policy.
Try the example
Use the original values or change them to test your understanding.