Welcome to Excel Jet Consult blog post. In this tutorial, we want to learn how to use Straight Line Depreciation function known as SLN Function. Let’s get started
Straight line basis is a method of calculating depreciation and amortization. It represents the simplest method to estimate the loss of value of an asset over time. To calculate loss of value of an asset over time, we need to divide the difference between an asset’s cost and its expected salvage value by the number of years it is expected to be used.
Salvage value is the estimated book value of an asset after depreciation is complete based on what a company expects to receive in exchange for the asset at the end of its useful life
SLN Function returns the straight-line depreciation of an asset for one period
SLN Syntax =SLN(cost, salvage, life)
In the caption below, we will calculate the depreciation for the three Asset using the Straight-Line Method
LAPTOP ASSET DEPRECIATION
The first asset (Laptop) has the following value: Purchased in September 2018 at ₦250,000 price. The Salvage value is ₦70,000 after 10 years in use
Therefore, in cell B13, execute the formula: =SLN($B$5,$C$5,$D$5)
$B$5 represent the cost of the asset which is ₦250,000
$C$5 represent the salvage value of the asset which is ₦70,000
$D$5 represent the life of the asset which is 10 years
Note, Absolute Cell Reference is applied to the cell referenced to ensure that when the formula is copied across to June 2019, it doesn’t break.
The conventional method of calculating the depreciation of the first asset is
Cost – Salvage Value
Years
Therefore: ₦250,000 – ₦70,000
10
₦180,000
10
₦18,000
HOME FURNITURE ASSET DEPRECIATION
In cell B14, execute the formula: =SLN($B$6,$C$6,$D$6)
Note, Absolute Cell Reference is applied to the cell referenced to ensure that when the formula is copied across to June 2019, it doesn’t break
GENERATOR ASSET DEPRECIATION
In cell B15, execute the formula: =SLN($B$7,$C$7,$D$7)
Note, Absolute Cell Reference is applied to the cell referenced to ensure that when the formula is copied across to June 2019, it doesn’t break
In the caption below, we can see that the first asset (Laptop) has ₦18,000 as its depreciation value over the 10 years period. The second and the third assets depreciation value are ₦22,000 and ₦25,000 respectively
