The SLN function in Google Sheets is useful for calculating the depreciation of an asset in each period using the straight-line method.
With the straight-line method, the value of an asset is reduced uniformly over each period. The SLN function allows you to find the depreciation using this method.
The rules for using the SLN function in Google Sheets are as follows:
- The function requires four arguments (cost, salvage, life).
- The function then outputs a single value which is equal to the depreciation of the asset over each period.
Let’s examine a possible use-case where we can use this function.
In this example, you’ve purchased an asset that depreciated over time. You’ve decided that the depreciation is calculated uniformly, dropping in value by a certain amount every time for each period. You know that you bought the asset at a certain price, and that it has a useful life of a certain number of years. You also have an idea of the asset’s final depreciated price, or the value of the product at the end of its useful life. How do we then calculate the price of our asset after the first year?
SLN function it becomes a straightforward calculation to find out the value of this depreciation. We only need to indicate the initial cost of the product, its salvage price, and the number of periods in the asset’s life.
Let’s now look into how to write the actual formula and work on a sample spreadsheet.
The Anatomy of the SLN Function
The syntax (the way we write) of the
SLN function is as follows:
=SLN(cost, salvage, life)
Let’s dissect this formula and understand what each part means:
- = the equal sign is how we start any function in Google Sheets.
- SLN() is our
SLNfunction. It computes the depreciation of an asset over a specified period using the straight-line method.
- cost refers to the acquisition cost of the asset, or the initial cost.
- salvage refers to the value of the asset at the end of depreciation.
- life refers to the number of periods over which the asset is depreciated.
A Real Example of Using SLN Function
Let’s look into an example of the
SLN function being used in a Google Sheet spreadsheet.
In the example below, we have a spreadsheet that looks at the depreciation of an asset over time. In the top-left corner, you can find certain values which are important for the computation. The asset had an initial cost of $100,000 and a salvage value of $10,000. The Life value indicates that the asset would depreciate over 6 years. Using the
SLN function, we were able to find out that the depreciation for each period is $15,000.
To get the value in Column B4, we just need to use the following formula:
You may make your own copy of the worksheet above using the link attached below.
Now that we’ve seen an example of using the
SLN function in Google Sheets, let’s begin writing it step-by-step!
How to Use SLN Function in Google Sheets
- To start using the
SLNfunction, make sure that you have the cost, salvage, and life values available. In the worksheet below, we have all three available in column B.
- Next, we just simply type the equal sign ‘=‘ to begin the function, followed by ‘SLN(‘.
- A tooltip box may appear with information on the
SLNfunction. If necessary, we may minimize this box by clicking on the arrow in the top-right-hand corner.
- Next, we just need to type in our arguments. Afterward, simply hit the Enter key on your keyboard to let the function evaluate.
- Now that we know how much our asset depreciates in each period, we can track the value of our asset over time, as seen below.
We can then also plot the change over time using a line chart. As the name implies, the depreciation resembles a straight line.
Frequently Asked Questions (FAQ)
- Why does my formula return an error?
It’s possible that any one of your arguments is not numeric. A non-numeric value will make the result incalculable. Also, note that the formula for getting the depreciation is
(Cost - Salvage)/ No. of Periods. If the number of periods is equal to zero the function will return a
- How do I get the actual value of the asset during a certain period?
SLNfunction returns the depreciation, we must subtract the result from the initial cost. For example, if the initial cost of your asset is $1,000 and it depreciates by $250 by a specified period, then the cost of the asset is $750 on that period.
That’s everything you need to know to start using the
SLN function in Google Sheets. This step-by-step guide shows how easy it is to compute the depreciation of an asset using a straight line.
You can now use the
SLN functions in Google Sheets together with the various other Google Sheets formulas available to create amazingly powerful spreadsheets.
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