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SYD Function Dictionary

Function Dictionary Function Examples Function Categories

SYD          
 
 
    Purchase Value Of A New Car £20,000
    Second Hand Value £8,000
    Number Of Years Ownership                6
  Deprecation in year 1 £3,429  =SYD(F3,F4,F5,1)
  Deprecation in year 2 £2,857  =SYD(F3,F4,F5,2)
  Deprecation in year 3 £2,286  =SYD(F3,F4,F5,3)
  Deprecation in year 4 £1,714  =SYD(F3,F4,F5,4)
  Deprecation in year 5 £1,143  =SYD(F3,F4,F5,5)
  Deprecation in year 6 £571  =SYD(F3,F4,F5,6)
  Total Depreciation : £12,000  =SUM(F7:F12)
What Does It Do ?            
This function calculates the depreciation of an item throughout its life, using the sum of the
years digits.
The depreciation is greatest in the earlier part of the  items life.
What is the Sum Of The Years Digits ?        
The sum of the years digits adds together the each of the years of the life.
A life of 3 years has a sum of 1+2+3 equalling 6.
Each of the years is then calculated as a percentage of the sum of the years.
Year 3 is 50% of 6, year 2 is 33% of 6, year 1 is 17% 6.
The total depreciation of the item is then allocated on the basis of these percentages.
A depreciation of £9000 is allocated as 50% being £4500, 33% being £3000, 17% being £1500.
£9,000
1 17% £1,500
2 33% £3,000
3 50% £4,500
As the greater part of the depreciation is allocated to the earliest years the values are
inverted, year 1 is $4500, year 2 is £3000 and year 1 is £1500.
Example 1            
    Purchase Price Of A Car :  £10,000
    Salvage Value :  £1,000
    Expected Life in Years :                   3
  As % Of Total Depreciation  
  Depreciation in Year 1 :  £4,500 ===> 0.5
  Depreciation in Year 2 :  £3,000 ===> 0.333333
  Depreciation in Year 3 :  £1,500 ===> 0.166667
 =SYD(E39,E40,E41,3)
1. Add together the digits of the Life to get the SumOfTheYearsDigits, 1+2+3=6.
2. Subtract the Salvage from the Purchase Price to get Total Deprectation, £10000-£1000=£9000.
3. Divide the Total Deprectation by the SumOfTheYearsDigits, £9000/6=£1500.
4. Invert the year digits, 1,2,3 becomes 3,2,1.
5. Multiply 3,2,1 by £1500 to get £4500, £3000, £1500, these values are the depreciation
    values for each of the three years in the life of the item.
Example 2            
The same example using 4 years.
    Purchase Price Of A Car :  £10,000
    Salvage Value :  £1,000
    Expected Life in Years :                   4
  As % Of Total Depriciation  
  Depreciation in Year 1 :  £3,600 0.4
  Depreciation in Year 2 :  £2,700 0.3
  Depreciation in Year 3 :  £1,800 0.2
  Depreciation in Year 4 :  £900 0.1
  Total Depreciation :  £9,000 100%
Example 3            
This example will adjust itself to accommodate any number of years between 1 and 10.
    Purchase Price Of A Car :  £10,000
    Salvage Value :  £1,000
    Expected Life in Years (1 to 10) :                   7
  As % Of Total Depriciation  
Year 1 £2,250 25%
Year 2 £1,929 21%
Year 3 £1,607 18%
Year 4 £1,286 14%
Year 5 £964 11%
Year 6 £643 7%
Year 7 £321 4%
Year      
Year      
Year      
£9,000 100%
Syntax              
=SYD(OriginalCost,SalvageValue,Life,PeriodToCalculate)
Formatting            
No special formatting is needed.

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