The SYD function in Google Sheets is useful for calculating the depreciation of an asset for a specified period using the sum of years digits method.
With the sum of years digits method, an asset depreciates more quickly during the beginning of the asset’s life. The SYD function allows you to find the depreciation of a single period within the asset’s life.
The rules for using the
SYD function in Google Sheets are as follows:
- The function requires four arguments (cost, salvage, life, period).
- The function then outputs a single value that is equal to the depreciation of the asset over a specified period using the sum of years digits method.
Let’s take a look at a quick example of this function in use!
In this example, you’ve recently purchased an asset that decreases in value over time. However, you would like to compute depreciation so that you can apply higher depreciation expenses in the earlier years and lower depreciation in later years.
SYD function it becomes quite easy to do this. We only need to indicate the initial cost of the product, its salvage price, and the number of periods in the asset’s life. With this information, we can even plot the actual value of the asset over time.
Now that we know when to use the
SYD function, let’s dive into how to write the actual formula and work on an actual sample spreadsheet.
The Anatomy of the SYD Function
So the syntax (the way we write) of the
SYD function is as follows:
=SYD(cost, salvage, life, period)
Let’s dissect this thing and understand what each of these terms means:
- = the equal sign is how we start any function in Google Sheets.
- SYD() is our SYD function. It computes the depreciation of an asset over a specified period using the sum of the years’ digits 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.
- period is the period we’re computing the depreciation of.
- We should note here that life and period must be thought of as the same unit, such as years.
A Real Example of Using SYD Function
Let’s look into an example of the
SYD function being used in a Google Sheet spreadsheet.
In the example below, we can see that we are looking 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.
The table in green shows the depreciation of the asset from its initial value seen in C6 to its salvage value of 10,000.
To get the value in Column B7, we just need to use the following formula:
The value is then computed by subtracting the current period’s depreciation from the value of the asset in the previous row.
You can make a copy of the spreadsheet above using the link I have attached below.
If you’re ready to use the
SYD function in Google Sheets, let’s begin writing it step-by-step!
How to Use SYD Function in Google Sheets
- To start using the
SYDfunction, select the cell we will first put our function’s output. In this example, we’ll start with cell B7.
- Next, we just simply type the equal sign ‘=‘ to begin the function, followed by ‘SYD(‘.
- As seen below, a tooltip box appears with info on the
SYDfunction. We can click on the arrow on the top-right-hand corner of the box to minimize it if necessary.
- The next step is to type our arguments. The first three are constants so we write them with a dollar sign ‘$’ to indicate it as an absolute cell reference. Afterward, simply hit Enter on your keyboard to let the function evaluate.
- We can drag down the formula to fill out the rest of the column. Now we know how much our single asset depreciates over six years.
That’s everything you need to know to start using the
SYD function in Google Sheets. This step-by-step guide shows how easy it is to compute the depreciation of an asset using the sum of years digit method.
You can now use the
SYD functions in Google Sheets together with the various other Google Sheets formulas available to create powerful and useful worksheets.
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