Excel SYD Function

The Excel SYD function has the syntax shown below.

`SYD(Cost, Salvage, Life, Per)`
Arguments used in the Excel NOMINAL function
SYD = Sum of the years digits depreciation
Cost = Cost of the asset
Salvage = Salvage value of the asset at the end of its useful life
Life = Number of periods in the useful life of the asset
Per = The period for which the depreciation expense is required

Use of the Excel SYD Function

The Excel SYD function is used to calculate the sum of the years digits depreciation for a given period.

Excel SYD Function and Annual Depreciation

A business purchases an asset for 9,000 and estimates it has a salvage value of 1,000 at the end of its 4 year useful life. Calculate the sum of the years digits depreciation for year 3.

The sum of the years digits depreciation for year 3 is given by the Excel SYD function as follows:

```Cost = 9,000
Salvage = 1,000
Life = 4 years
Per = 3

SYD Depreciation = SYD(Cost, Salvage, Life, Per)
SYD Depreciation = SYD(9000, 1000, 4, 3)
SYD Depreciation = 1,600
```

The sum of years digits depreciation for year 3 is calculated as 1,600.

Excel SYD Function and Monthly Depreciation

In the above example the depreciation was calculated on an annual basis and the period was defined in terms of years. However, the Excel SYD function can be used with any period simply by defining the length of the period. For example, if the life of the asset above was defined as 48 months instead of 4 years, then the SYD depreciation for month 11 can be calculated as follows:

```Cost = 9,000
Salvage = 1,000
Life = 48 months
Per = 11

SYD Depreciation = SYD(Cost, Salvage, Life, Per)
SYD Depreciation = SYD(9000, 1000, 48, 11)
SYD Depreciation = 258.50
```

The sum of years digits depreciation for month 11 is calculated as 258.50.

Depreciation calculated using Excel SYD function is higher in the earlier periods than in the later periods of the assets useful life, and for this reason is known as an accelerated depreciation method.

The Excel SYD function is one of many Excel financial functions used in accounting calculations, discover another at the links below.

Excel SYD Function November 6th, 2016

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