How To Calculate Straight-Line Depreciation Using Microsoft Excel

Spreadsheet applications like MS Excel are not only used for keeping data or organizing data. MS Excel also allows computation of data. This way, you don't have to press on the calculator over and over again just to compute almost similar problems. That's why it is very useful for both companies and individuals. Try how useful this application is by calculating your assets' straight-line depreciation value.

The straight-line depreciation value determines how much an asset depreciates over the course of time. This computation is only limited to things that depreciates and not for things that appreciates in value. The following steps will be your guide for calculating the straight-line depreciation using MS Excel.

  • Open the MS Excel. Click on the Start button, go to All Programs, and Microsoft Office. Choose MS Excel.
  • Enter data. Straight-line depreciation depends on three things-the asset's original cost, the asset's salvage value, and the number of its useful years.

The original cost is simply the amount you spent to purchase the asset. The salvage value is the minimum amount that the asset can be sold after its useful lifetime. The number of useful years will depend upon the asset. It's best that you consult the GAAP or generally accepted accounting principles when determining the last two data.

On a blank spreadsheet, label the three columns for the three essential data. For this article, we will use the following labels-Original Cost, Salvage Value, and Useful Life. Type in these labels in B1, C1, and D1 cells. Save the first column for the name of the asset.

Enter the data of an asset. Place the label of the asset on the A3 cell. Enter its data for the respective columns. For instance, "laptop" is the asset, $700 is the original cost, $100 is the salvage value, and 5 years is the useful life.

Continue entering data for your other assets.

  • Enter the formula. Straight-line depreciation is calculated by subtracting the salvage value from the original cost and then dividing the difference by the useful life. Here is the mathematical formula for this:

SLD    = (Original Cost - Salvage Value) 

                              Useful Life

In MS Excel, this is written as: SLD = (OC - SV) / UL.

Simply change the variables with the cell location of the data. Type in the formula on the cell right after the Useful Life column. Type this formula "=(B3-C3)/D3" on the E3 cell. Instead of typing the names of the cells, you can also click them on and they will automatically be included in the formula.

Press enter and the straight-line depreciation will show up. If you used the example data, the answer should be 120. That means that every year, the laptop is depreciating $120. The acquired data can also be used for determining the current value of your asset. For instance, if the laptop is three years old, then its current value is $700 - (120*3) = $340.

If you have entered more assets, then simply copy the formula on the E3 cell to the cells under it (E4, E5, E6, etc.). You will see that the chosen cells in the formula are automatically changed, too.

Calculating the straight-line depreciation of many assets will be more ideal with the MS Excel. But what if you only need to compute values for one or two assets? Better use your basic calculator to know the value. Online calculators like the one in CalculatorSoup are better alternatives. Simply provide them with the needed data and let them calculate the value for you.


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