Depreciation template and excel

We have created a simple and easy Depreciation Calculator with predefined formulas. Just enter a few values and it will automatically calculate depreciation by both the methods. Click here to download the Depreciation Calculator Excel Template. In this section, the template calculates the straight-line depreciation.

It is calculated based on Asset value, scrap value and life of an asset. Here, asset value is the asset price in addition to the additional costs associated with an asset. These costs include fixtures, transportation, insurance, etc. Enter the Scrap Value and Life Span for the asset and 0 if an asset is completely written off. When asset scrap value is 0 the template will calculate the depreciation on complete asset value. The balance amount is just for accuracy check.

It should always be 0. It is the Scrap Value minus Book Value at the end of the life span. Enter the Scrap Value and Life Span of the asset. In Diminishing Method, the scrap value cannot be 0. The following additional steps can be used to derive the formula for depreciation under the double-declining balance method:. Step 9: Finally, the formula for depreciation can be derived by dividing the difference between the asset cost step 1 and the accumulated depreciation step 8 by the useful life of the asset step 3 , which is then multiplied by 2 as shown below.

The concept of depreciation is important from the perspective of financial accounting and reporting. The periodic depreciation is charged to the income statement as an expense according to the matching principle. In other words, the value of the annual depreciation is the portion of the fixed asset that has been used in revenue generation during the year. Further, it also offers a tax benefit, the extent of which in each year varies based on the method of depreciation used.

This is a guide to Depreciation Formula. Here we discuss how to calculate Depreciation along with practical examples. We also provide a downloadable excel template. You may also look at the following articles to learn more —. Submit Next Question.

By signing up, you agree to our Terms of Use and Privacy Policy. Depreciation Basis C-S n : The depreciation basis is the portion of the cost used to calculate the depreciation and is usually the cost minus the salvage value. However, for some methods like declining-balance depreciation or the accelerated cost recovery system ACRS , the depreciation basis is the unadjusted full purchase price. Book Value BV j : The book value is simply the difference between the purchase price and the accumulated depreciation.

The book value at the end of 5 years of depreciation is denoted BV 5. The book value is used for accounting and calculations. It does not have anything to do with the market value of the asset. In the declining balance depreciation method , the book value at the end of the depreciation period does not equal the salvage value.

Date Placed in Service : Unlike the MACRS which applies a half-year, mid-quarter, or mid-month convention and requires knowing when the asset is placed in service, the depreciation methods included in the Depreciation Schedule require only specifying the first year that the asset is placed in service.

Excel Straight-Line Depreciation SL Straight-line depreciation is the simplest depreciation method to calculate. Cost C : This is the purchase price or cost of the asset. Disclaimer : The information on this page is for illustrative and educational purposes only. We do not guarantee the results or the applicability to your financial situation. You may want to seek the advice of a qualified professional regarding financial decisions. Follow Us On Sitemap Privacy Policy Terms of Use.