The `AMORLINC` function in Excel is used to calculate the depreciation for each accounting period, where the depreciation is linear. This function is often used for assets that lose value over time, helping to distribute that depreciation evenly across designated periods. Here’s how you can use it:
Syntax
AMORLINC(cost, date_purchased, first_period, salvage, period, rate, [basis])
Arguments
- cost: The initial cost of the asset.
- date_purchased: The purchase date of the asset.
- first_period: The end of the first period.
- salvage: The salvage value at the end of the life of the asset.
- period: The period for which you want to calculate depreciation. This must be in the same units as the rate (e.g., if the rate is annual, this should be years).
- rate: The rate of depreciation.
- basis (optional): The year basis to use, which defines how the year is calculated. It can be:
- 0 or omitted: 360 days (NASD method)
- 1: Actual days
- 3: 365 days in a year
- 4: 360 days in a year (European method)
Example
Suppose you want to calculate the linear depreciation for an asset that:
- Costs $100,000
- Was purchased on January 1, 2023
- Has a salvage value of $10,000
- Has a depreciation rate of 10% annually
- First period ends on December 31, 2023
- Uses the actual number of days between months (basis 1)
Here is how you would enter it into Excel:
=AMORLINC(100000, DATE(2023,1,1), DATE(2023,12,31), 10000, 1, 0.1, 1)
Notes
- The `AMORLINC` function is specific to certain versions of Excel, particularly those that support European Union accounting calculations.
- Make sure the format of your date cells is set correctly to recognize date formats in Excel.
- The depreciation calculated by `AMORLINC` assumes residual value to be distributed evenly over the period specified.
This should provide a standardized method of calculating depreciation across uniform accounting periods.
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