How do you calculate appreciation using Excel?

Answer 1

Instructions

1. • 1

     Do your homework. To calculate the fixed-declining depreciation of an asset, you will need to know the cost of the asset, its lifespan, its value at the end of its lifespan (sometimes called salvage) and the period of time over which you need to find the depreciation.

   • 2

     Build your Excel spreadsheet. In cell A1, enter the title "Original Cost" and in cell B1 enter that cost. In cell A2, enter the title "Salvage" and in cell B2 enter that amount.

   • 3

     Enter the heading "Life" in cell A3 and in cell B3 enter the predicted lifespan of the asset in years. Enter the heading "Months" in cell A4 and enter the number 12 in cell B4 since there are 12 months in a year.

   • 4

     Click on cell A7 and enter the heading "Period", and in cell B7, enter the heading "Depreciation." In the cells below A7 (A8 through however many you need), enter the numbers for one of the years over which you are finding the fixed-declining depreciation. You will need one row per year.

   • 5

     Key in the following formula: [=DB(B1,B2,B3,B7,B4)]. Then you can hit the enter key on your keyboard and let Excel do its work.

   • 6

     Understand the formula so you can use it again: =DB tells the computer to calculate an asset's fixed-declining depreciation. B1 is the asset's original cost, B2 is the salvage amount, B3 is the lifespan of the asset, B7 is the number of the year of depreciation you are calculating and B4 is the number of months in the year.