How to Calculate Sum-of-Years’ Digits Depreciation with SYD in Excel

Depreciate a construction excavator with the sum-of-years’ digits method and track its book value.

You will learn to

• Calculate SYD depreciation for year 1
• Calculate SYD for any year
• Find book value after three years

How it works

Sum-of-years’ digits depreciation charges a falling fraction of the depreciable cost each year. For a 7-year life the digits add up to 28, so year 1 gets 7/28, year 2 gets 6/28 and so on. =SYD(185000,25000,7,1) returns $40,000.

SYD is an accelerated method like DDB but declines in a straight line rather than a curve, and always ends exactly at salvage value. Subtract the charges so far from the cost to get book value.

=SYD(B2,B3,B4,1)