# SYD Function

Calculates the sum-of-years' digits depreciation of an asset

Calculates the sum-of-years' digits depreciation of an asset

The SYD Function is a Financial function. SYD is short for **s**um of **y**ears **d**igits. The function helps in calculating the depreciation of an asset, specifically the sum-of-years’ digits depreciation for a specified period in the lifetime of an asset.

Sum-of-years’ digits depreciation is a popular method in calculating the accelerated depreciation of an asset. The formula is as follows:

Where:

- Cost is the initial cost of the asset (at start of period 1)
- Salvage is the final value of the asset at the end of its lifetime
- Life is the number of periods over which the depreciation occurs
- Per is the period for which the depreciation is being calculated

The SYD function is helpful to a financial analyst when building financial models or creating a fixed asset depreciation schedule for analysis.

**=SYD(cost, salvage, life, per)**

The function uses the following arguments:

**Cost**(required argument) – It is the initial cost of the asset.**Salvage**(required argument) – It is the value of the asset at the end of the depreciation. It can be zero. It is also known as the salvage value.**Life**(required argument) – It is the useful life of the asset or the number of periods for which the asset will be depreciated.**Per**(required argument) – It is the period for which we want to calculate the depreciation.

To understand the uses of the SYD function, let us consider an example:

Suppose we want to calculate the depreciation for an asset with an initial cost of $300,000 and a salvage value of $5,000 after 10 years.

We need to calculate the depreciation over five years. The formula for calculating the depreciation amount will be:

We get the result below:

For the subsequent years, we will change the *per *argument.

So for the second year, the formula would be =SYD(D5,D6,D7,2). For the third year, the formula would be =SYD(E5,E6,E7,3).

The result we get is shown below:

- We need to provide the arguments
*life*and*per*in the same units of time: days, months, or years. - #VALUE! error – Occurs when the given arguments are non-numeric.
- #NUM! error – Occurs when:
- The salvage argument provided is less than zero.
- The life or per argument given is less than or equal to zero.
- The per argument provided is greater than the life argument provided in the formula.

**Click here to download the sample Excel file**

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