Excel SYD Function
last modified April 4, 2025
The SYD function calculates the sum-of-years' digits depreciation
for an asset. This accelerated depreciation method allocates higher depreciation
in earlier years. This tutorial provides a comprehensive guide to using the
SYD function with detailed examples. You'll learn the syntax,
practical applications, and how it compares to other depreciation methods.
SYD Function Basics
The SYD function calculates depreciation using the sum-of-years'
digits method. It requires cost, salvage value, life, and period arguments.
This method front-loads depreciation expenses compared to straight-line.
| Component | Description |
|---|---|
| Function Name | SYD |
| Syntax | =SYD(cost, salvage, life, per) |
| Arguments | cost, salvage, life, per |
| Return Value | Depreciation for specified period |
This table breaks down the essential components of the SYD
function. It shows the required arguments and what each represents in the
depreciation calculation.
Basic SYD Example
This example demonstrates a simple SYD calculation for an asset with a 5-year life. We'll calculate the first year's depreciation.
| Parameter | Value |
|---|---|
| Cost | $10,000 |
| Salvage Value | $1,000 |
| Life | 5 years |
| Period | 1 |
=SYD(10000, 1000, 5, 1)
This formula calculates first-year depreciation for a $10,000 asset with $1,000 salvage value over 5 years. The result is $3,000. SYD allocates more depreciation in early periods.
SYD for Multiple Periods
This example shows SYD calculations for all periods of an asset's life. We'll create a depreciation schedule showing yearly amounts.
| Year | Depreciation |
|---|---|
| 1 | =SYD(10000, 1000, 5, 1) |
| 2 | =SYD(10000, 1000, 5, 2) |
| 3 | =SYD(10000, 1000, 5, 3) |
| 4 | =SYD(10000, 1000, 5, 4) |
| 5 | =SYD(10000, 1000, 5, 5) |
=SYD(10000, 1000, 5, 1) // Year 1: $3,000 =SYD(10000, 1000, 5, 2) // Year 2: $2,400 =SYD(10000, 1000, 5, 3) // Year 3: $1,800 =SYD(10000, 1000, 5, 4) // Year 4: $1,200 =SYD(10000, 1000, 5, 5) // Year 5: $600
This series shows the complete depreciation schedule. Notice how the amounts decrease each year. The total depreciation over 5 years equals $9,000 (cost - salvage value).
SYD with Cell References
A more practical approach uses cell references instead of hard-coded values. This makes the worksheet dynamic and easier to maintain.
| A | B |
|---|---|
| Cost: | 15000 |
| Salvage: | 2000 |
| Life (years): | 7 |
| Year 3 Depreciation: | =SYD(B1, B2, B3, 3) |
=SYD(B1, B2, B3, 3)
This formula calculates year 3 depreciation for a $15,000 asset with $2,000 salvage value over 7 years. Using cell references allows easy parameter changes without modifying formulas.
SYD vs Straight-Line Comparison
This example compares SYD depreciation to straight-line depreciation for the same asset. It highlights the accelerated depreciation pattern of SYD.
| Year | SYD | Straight-Line |
|---|---|---|
| 1 | =SYD(20000, 2000, 5, 1) | =SLN(20000, 2000, 5) |
| 2 | =SYD(20000, 2000, 5, 2) | =SLN(20000, 2000, 5) |
| 3 | =SYD(20000, 2000, 5, 3) | =SLN(20000, 2000, 5) |
| 4 | =SYD(20000, 2000, 5, 4) | =SLN(20000, 2000, 5) |
| 5 | =SYD(20000, 2000, 5, 5) | =SLN(20000, 2000, 5) |
=SYD(20000, 2000, 5, 1) // Year 1 SYD: $6,000 =SLN(20000, 2000, 5) // Straight-line: $3,600 each year
The SYD method shows higher early-year depreciation ($6,000 vs $3,600). This comparison helps choose the right depreciation method for tax or reporting needs.
SYD with Partial Years
This advanced example demonstrates SYD calculations when the asset life isn't a whole number. We'll calculate depreciation for a 4.5-year asset life.
| Year | Depreciation |
|---|---|
| 1 | =SYD(12000, 1500, 4.5, 1) |
| 2 | =SYD(12000, 1500, 4.5, 2) |
| 3 | =SYD(12000, 1500, 4.5, 3) |
| 4 | =SYD(12000, 1500, 4.5, 4) |
| 4.5 | =SYD(12000, 1500, 4.5, 4.5) |
=SYD(12000, 1500, 4.5, 1) // Year 1: $3,500 =SYD(12000, 1500, 4.5, 4.5) // Final half-year: $389
The SYD function handles fractional periods correctly. For the 4.5-year life, Excel calculates depreciation for each full year and the final half-year period. Total depreciation equals $10,500 (cost - salvage value).
SYD Error Handling
This example shows common errors when using the SYD function and how to prevent them. Understanding these helps create robust depreciation worksheets.
| Error Example | Result | Reason |
|---|---|---|
| =SYD(10000, 2000, 0, 1) | #DIV/0! | Life cannot be zero |
| =SYD(10000, 2000, 5, 6) | #NUM! | Period exceeds life |
| =SYD("text", 2000, 5, 1) | #VALUE! | Non-numeric cost |
=SYD(10000, 2000, 0, 1) // Error: life must be > 0 =SYD(10000, 2000, 5, 6) // Error: period must be ≤ life
These examples demonstrate SYD's error conditions. Always validate inputs before calculations. Use IFERROR to handle potential errors gracefully in real-world worksheets.
SYD with Named Ranges
Using named ranges makes SYD formulas more readable and maintainable. This example shows SYD calculations with defined names for each parameter.
| A | B |
|---|---|
| AssetCost | 25000 |
| SalvageValue | 4000 |
| AssetLife | 8 |
| Year4Depr | =SYD(AssetCost, SalvageValue, AssetLife, 4) |
=SYD(AssetCost, SalvageValue, AssetLife, 4)
This formula calculates year 4 depreciation using named ranges instead of cell references. The names make the formula's purpose clearer and reduce errors when modifying the worksheet structure.
The SYD function provides an accelerated depreciation method that
matches assets with higher utility in early years. It's particularly useful for
equipment that loses value quickly. Remember that SYD requires all four
arguments and validates period against asset life. For tax purposes, always
consult accounting regulations as depreciation rules vary by jurisdiction.
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