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9. Depreciation
Depreciation lets you calculate the amount that a business expense can be offset by income
(depreciated) over a given year.
• This calculator supports the following four types of depreciation calculations.
straight-line (
SL), fixed-percentage (FP), sum-of-the-years’-digits (SYD), or declining-balance
(DB).
• Any one of the above methods can be used to calculate depreciation for a specified period.
A table and graph of the depreciated amount and undepreciated amount in year
j.
S Straight-Line Method (SL)
SL
j : depreciation charge for the jth year
n : useful life
PV : original cost (basis)
FV : residual book value
j : year for calculation of depreciation
cost
Y−1 : number of months in the first year
of depreciation
S Fixed-Percentage Method (FP)
FP
j : depreciation charge for the jth year
RDVj : remaining depreciable value at the
end of jth year
I% : depreciation ratio
S Sum-of-the-Years’-Digits Method (SYD)
SYD
j : depreciation charge for the jth year
RDVj : remaining depreciable value at the
end of jth year
{Y–1}(PV–FV )
SL
1 =
n 12
S
(PV–FV )
SL
j =
n
12–{Y–1}
({Y–1}x12)
(PV–FV )
n 12
S
SLn+1 =
{Y–1}(PV–FV )
SL1 =
n 12
S
(PV–FV )
SL
j =
n
12–{Y–1}
({Y–1}x12)
(PV–FV )
n 12
S
SLn+1 =
100
I%
FP
j = (RDVj–1 )9) s
100
{Y–1}
I%
FP
1 = PV s
12
s
FP
n+1 = RDVn ({Y–1}x12)
RDV
1 = PV – FV – FP1
RDVj = RDVj–1 – FPj
RDVn+1 = 0 ({Y–1}x12)
100
I%
FP
j = (RDVj–1 )9) s
100
{Y–1}
I%
FP
1 = PV s
12
s
FP
n+1 = RDVn ({Y–1}x12)
RDV
1 = PV – FV – FP1
RDVj = RDVj–1 – FPj
RDVn+1 = 0 ({Y–1}x12)
n (n 1)
Z =
2
2
(n' integer part +1)(n' integer part + 2*n' fraction part )
Z' =
SYD1 =
{Y–1}
12
n
Z
s (PV – FV )
n'– M2
Z'
)(PV – FV – SYD
1)(jx1)SYDj = (
RDV
1 = PV – FV – SYD1
RDVj = RDVj –1 – SYDj
n'–(n 1)2
Z'
)(PV – FV – SYD
1)({Y–1}x12)
12–{Y–1}
12
sSYD
n+1 = (
12
{Y–1}
n' = n –
n (n 1)
Z =
2
2
(n' integer part +1)(n' integer part + 2*n' fraction part )
Z' =
SYD1 =
{Y–1}
12
n
Z
s (PV – FV )
n'– M2
Z'
)(PV – FV – SYD
1)(jx1)SYDj = (
RDV
1 = PV – FV – SYD1
RDVj = RDVj –1 – SYDj
n'–(n 1)2
Z'
)(PV – FV – SYD
1)({Y–1}x12)
12–{Y–1}
12
sSYD
n+1 = (
12
{Y–1}
n' = n –