# How to use the SYD function

**What is the SYD function?**

The SYD function calculates the yearly asset depreciation of a given year.

**What is SYD function an abbreviation of?**

SYD stands for the "Sum-of-the-Years-Digits" depreciation method, which is a way of calculating depreciation such that the charges decrease each year over an asset's lifespan.

**What is the "Sum-of-the-Years-Digits" depreciation method?**

The sum-of-the-years-digits (SYD) method is a way to calculate depreciation such that the charges decrease each year over an asset's lifespan.

For example, say an asset has a 5 year life. The SYD fractions for each year would be:

Year 1: 5/15

Year 2: 4/15

Year 3: 3/15

Year 4: 2/15

Year 5: 1/15

(Sum 1+2+3+4+5 = 15)

Depreciation in year 1 is (Cost-salvage) * 5/15, in year 2 it's (Cost-salvage) * 4/15, becoming smaller each year.

**What is depreciation of an asset?**

Depreciation is an accounting method that allows businesses to allocate the cost of a tangible asset over its useful life. It represents how much of an assetâ€™s value has been used up over time.

Depreciation helps businesses to match their expenses with their revenues, and to reduce their taxable income by deducting the depreciation expense.

**What is a depreciable asset?**

A depreciable asset is a long-term tangible or physical asset like machinery or equipment that loses value over time due to wear and tear from usage. Depreciation allows a business to recover the cost of the asset as an expense over its useful lifespan.

**What is the difference between DB function and the SYD function?**

The DB function calculates the fixed-declining balance depreciation each period using a fixed rate, while SYD calculates the sum-of-the-years-digits depreciation based on a declining charge-off fraction each period.

**What is the difference between DDB function and the SYD function?**

DDB uses fixed declining percentages of the book value to calculate depreciation each period, while SYD calculates the sum-of-the-years-digits depreciation based on a declining charge-off fraction each period.

**Depreciation functions in Excel**

Function | Description |
---|---|

SYD(cost, salvage, life, period) | Sum-of-the-years digits depreciation |

DB(cost, salvage, life, period, [month]) | Fixed-declining balance depreciation |

DDB(cost, salvage, life, period, [factor]) | Double-declining balance depreciation |

AMORLINC(cost, date_purchased, first_period, salvage, period, rate, [basis]) | Depreciation for period using linear method |

AMORDEGRC(cost, date_purchased, first_period, salvage, period, rate, [basis]) | Depreciation from date of purchase to end of period |

VDB(cost, salvage, life, start_period, end_period, [factor], [no_switch]) | Variable declining balance depreciation |

### SYD function Syntax

SYD(*cost*, *salvage*, *life*, *per*)

### SYD function Arguments

cost |
Required. The cost of an asset. |

salvage |
Required. The final value after depreciation (salvage value). |

life |
Required. The number of periods the asset isÂ depreciated. |

per |
Required. The period you want to know theÂ depreciation for. |

**What is salvage value?**

Salvage value is the estimated value of an asset at the end of its useful life. It is also known as scrap value or residual value. It is used to calculate the depreciation expense of an asset over its useful life.

### SYD function example

This example shows the depreciation the first year of an asset that was purchased for 10000 and a salvage prise for 2000 and a life span for five years.

Formula in cell C6:

### SYD function not working

### How is the SYD function calculated

### Functions in 'Financial' category

The SYD function function is one of 29 functions in the 'Financial' category.

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