Excel SLN Function
last modified April 4, 2025
The SLN function calculates straight-line depreciation for an asset
over one period. It's essential for financial analysis and accounting. This
tutorial provides a comprehensive guide to using the SLN function.
You'll learn its syntax, practical applications, and see detailed examples to
master this financial function.
SLN Function Basics
The SLN function returns the straight-line depreciation of an asset
for one period. It uses three parameters: cost, salvage value, and life. The
formula divides the depreciable amount equally over the asset's useful life.
| Component | Description |
|---|---|
| Function Name | SLN |
| Syntax | =SLN(cost, salvage, life) |
| Arguments | cost, salvage, life |
| Return Value | Depreciation per period |
This table outlines the key components of the SLN function. The
function requires three arguments and returns the depreciation amount per period.
All arguments must be positive numbers for accurate results.
Basic SLN Example
This example demonstrates the simplest use of the SLN function with hard-coded values. We'll calculate annual depreciation for an asset worth $10,000.
=SLN(10000, 1000, 5)
This formula calculates annual depreciation for a $10,000 asset with $1,000 salvage value over 5 years. The result is $1,800 per year. The calculation is (cost - salvage) / life = (10000-1000)/5.
SLN with Cell References
A more practical use of SLN involves referencing cells containing
the asset parameters. Here's an example with cell references.
| A | B |
|---|---|
| Cost: | 15000 |
| Salvage: | 3000 |
| Life (years): | 6 |
| Depreciation: | =SLN(B1,B2,B3) |
The table shows a spreadsheet with asset parameters in column B and the SLN formula in cell B4 that references these cells. This approach makes the worksheet more flexible and easier to update.
=SLN(B1,B2,B3)
This formula calculates annual depreciation for a $15,000 asset with $3,000 salvage value over 6 years. The result is $2,000 per year. Using cell references allows easy parameter changes without modifying the formula.
SLN with Monthly Depreciation
The SLN function can calculate depreciation for any time period by
adjusting the life parameter. This example shows monthly depreciation.
| A | B |
|---|---|
| Cost: | 8000 |
| Salvage: | 500 |
| Life (months): | 36 |
| Monthly Depr.: | =SLN(B1,B2,B3) |
This table demonstrates using SLN for monthly depreciation by expressing the asset life in months. The formula remains the same, but the interpretation of the result changes to monthly amounts.
=SLN(B1,B2,B3)
This formula calculates monthly depreciation for a $8,000 asset with $500 salvage value over 36 months. The result is $208.33 per month. The same function works for any time unit by adjusting the life parameter accordingly.
SLN with Zero Salvage Value
Many assets depreciate to zero value. This example shows SLN calculation when the salvage value is zero.
| A | B |
|---|---|
| Cost: | 5000 |
| Salvage: | 0 |
| Life (years): | 4 |
| Annual Depr.: | =SLN(B1,B2,B3) |
The table shows an asset that fully depreciates to zero value. The SLN formula simplifies to cost divided by life when salvage is zero. This is common for assets with no residual value.
=SLN(B1,B2,B3)
This formula calculates annual depreciation for a $5,000 asset with no salvage value over 4 years. The result is $1,250 per year. The calculation is simply 5000/4 since the salvage value is zero.
SLN for Partial Year Depreciation
The SLN function can calculate depreciation for partial years by
adjusting the life parameter. This example shows quarterly depreciation.
| A | B |
|---|---|
| Cost: | 12000 |
| Salvage: | 2000 |
| Life (quarters): | 16 |
| Quarterly Depr.: | =SLN(B1,B2,B3) |
This table demonstrates using SLN for quarterly depreciation by expressing the asset life in quarters (4 years = 16 quarters). The formula calculates equal depreciation for each quarter.
=SLN(B1,B2,B3)
This formula calculates quarterly depreciation for a $12,000 asset with $2,000 salvage value over 16 quarters. The result is $625 per quarter. The SLN function adapts to any depreciation period by adjusting the life parameter.
SLN Compared to Other Depreciation Methods
The SLN function provides constant depreciation amounts each
period. This differs from accelerated methods like DDB or SYD. This example
compares SLN to other approaches.
| Year | SLN | DDB | SYD |
|---|---|---|---|
| 1 | 2000 | 4000 | 3333 |
| 2 | 2000 | 2400 | 2667 |
| 3 | 2000 | 1440 | 2000 |
| 4 | 2000 | 160 | 1333 |
| 5 | 2000 | 0 | 667 |
This table compares depreciation methods for a $10,000 asset with $0 salvage over 5 years. SLN provides equal amounts each year, while DDB and SYD front-load depreciation. Each method has different financial reporting implications.
The SLN function is essential for financial analysis and
accounting. It provides the simplest depreciation calculation with equal
periodic amounts. While other methods might match asset usage patterns better,
SLN offers predictability and simplicity. Understanding when to use SLN versus
other methods is key for accurate financial reporting.
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