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How to calculate depreciation in Excel and Google Sheets

Topic:Finance basics
Excel & Google Sheets
=SLN(A2,B2,C2)

Verified example

Computed by a real spreadsheet engine on the sample data below.

Asset CostSalvage ValueUseful Life (Yrs)Annual Depreciation
1000010005
50000500010
2500025007
80005004

=SLN(A2,B2,C2)1800

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Step by step

  1. 1Set up three columns: Asset Cost (A), Salvage Value (B), and Useful Life in Years (C).
  2. 2In the Annual Depreciation column, enter =SLN(A2,B2,C2). This returns the equal depreciation charge for each year under the straight-line method.
  3. 3For declining balance depreciation, use =DB(A2,B2,C2,period) where the last argument is the year number (1, 2, 3, etc.).

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Frequently asked

What is the difference between SLN and DB?

SLN gives the same depreciation amount each year (straight-line). DB gives higher depreciation in early years that declines over time (accelerated).

Can I create a full depreciation schedule?

Yes. Use SLN in the first year column and fill down; for DB, use the period argument (1, 2, 3…) down each row to get each year's charge.

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Formulas used

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