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AMORLINC: Calculating depreciation for each accounting period

From: Excel 2010: Financial Functions in Depth

Video: AMORLINC: Calculating depreciation for each accounting period

Like the AMORDEGRC function which lets you calculate depreciation using coefficients defined under French accounting rules, the AMORLINC function lets you find the depreciation for a specific accounting period and again this is a function that you will use within the French system. So to calculate depreciation for an accounting period you need the following arguments. The first is the cost. That's simply the amount that you've paid for the asset. The date you purchased it, and then the first period, and that date is the end of the first depreciation period. Then you have the salvage value, which is the amount that you can sell the asset for after it's reached the end of its life.

AMORLINC: Calculating depreciation for each accounting period

Like the AMORDEGRC function which lets you calculate depreciation using coefficients defined under French accounting rules, the AMORLINC function lets you find the depreciation for a specific accounting period and again this is a function that you will use within the French system. So to calculate depreciation for an accounting period you need the following arguments. The first is the cost. That's simply the amount that you've paid for the asset. The date you purchased it, and then the first period, and that date is the end of the first depreciation period. Then you have the salvage value, which is the amount that you can sell the asset for after it's reached the end of its life.

Then you have the period for which you're calculating depreciation and that refers to a year. So in this case we have here number one. And then the Rate, which we've set to 10% and the Rate for using a depreciation coefficient like this is set under French accounting rules and it's something that you can look up. Then the final argument is the basis and this is how you count the days in a month and in a year. Zero is the American system standard, which is 30-day months times 12 months for a 360 day year, then there's also the European method which the French use and that is option number 4, so that's what I have in cell C9.

So with all that information in place, I can click cell C12 and start creating the formula. So type in an equal sign and then AMORLINC, then a left parentheses, and the first argument is the cost that's in C3, comma, the date purchased is in C4, comma, end of the first period is C5, comma, then the salvage value is in cell C6, comma, the period is C7, comma, the rate, which is again the depreciation coefficient, that's in C8, comma, and then the basis, in other words how we count days in a month and in then a year, and that basis is number four. It's in cell C9. I type a right parentheses to make sure everything is correct. It appears to be and now I press Tab.

And when I do, I see that the depreciation is 37,500 Euros. Now if I would change the period from 1 to 2 in cell C7 and press Enter, you'll see that the depreciation doesn't change. Now if I change the period to 9 you'll see that the depreciation goes down quite a bit. That's because we are approaching the salvage value and the depreciation coefficient operates differently in the calculation. When you calculate depreciation, be sure that you know which set of rules you're using. If you operate under the French system, you'll probably find that the AMORLINC function to be useful.

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Excel 2010: Financial Functions in Depth

52 video lessons · 14118 viewers

Curt Frye
Author

 
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  1. 2m 11s
    1. Welcome
      1m 6s
    2. Using the exercise files
      36s
    3. Disclaimer
      29s
  2. 28m 32s
    1. PMT: Calculating a loan payment
      3m 31s
    2. PPMT and IPMT: Calculating principal and interest per loan payment
      4m 18s
    3. CUMPRINC and CUMIPMT: Calculating cumulative principal and interest paid between periods
      4m 30s
    4. ISPMT: Calculating interest paid during a specific period
      2m 13s
    5. EFFECT and NOMINAL: Finding nominal and effective interest rates
      3m 31s
    6. ACCRINT and ACCRINTM: Calculating accrued interest for investments
      4m 15s
    7. RATE: Discovering the interest rate of an annuity
      2m 41s
    8. NPER: Calculating the number of periods in an investment
      3m 33s
  3. 19m 5s
    1. SLN: Calculating depreciation using the straight-line method
      1m 48s
    2. DB: Calculating depreciation using the declining balance method
      3m 10s
    3. DDB: Calculating depreciation using the double-declining balance method
      3m 20s
    4. SYD: Calculating depreciation for a specified period
      2m 13s
    5. VDB: Calculating declining balance depreciation for a partial period
      3m 24s
    6. AMORDEGRC: Calculating depreciation using a depreciation coefficient
      2m 27s
    7. AMORLINC: Calculating depreciation for each accounting period
      2m 43s
  4. 22m 33s
    1. FV: Calculating the future value of an investment
      2m 48s
    2. FVSCHEDULE: Calculating the future value of an investment with variable returns
      2m 21s
    3. PV: Calculating the present value of an investment
      2m 6s
    4. NPV: Calculating the net present value of an investment
      3m 17s
    5. IRR: Calculating internal rate of return
      2m 33s
    6. XNPV: Calculating net present value given irregular inputs
      2m 32s
    7. XIRR: Calculating internal rate of return for irregular cash flows
      1m 48s
    8. MIRR: Calculating internal rate of return for mixed cash flows
      2m 2s
    9. DISC: Calculating the discount rate of a security
      3m 6s
  5. 24m 12s
    1. COUPDAYBS: Calculating total days between coupon beginning and settlement
      3m 2s
    2. COUPDAYS: Calculating days in the settlement date's coupon period
      2m 48s
    3. COUPDAYSNC: Calculating days from the settlement date to the next coupon date
      3m 1s
    4. COUPNCD: Calculating the next coupon date after the settlement date
      2m 43s
    5. COUPNUM: Calculating the number of coupons between settlement and maturity
      2m 55s
    6. COUPPCD: Calculating the date of a coupon due immediately before settlement
      3m 4s
    7. DURATION: Calculating the annual duration of a security
      3m 20s
    8. MDURATION: Calculating the duration of a security using the modified Macauley method
      3m 19s
  6. 28m 43s
    1. DOLLARDE and DOLLARFR: Converting between fractional prices and decimal prices
      2m 36s
    2. INTRATE: Calculating the interest rate of a fully invested security
      2m 50s
    3. RECEIVED: Calculating the value at maturity of a fully invested security
      2m 46s
    4. PRICE: Calculating the price of a security that pays periodic interest
      3m 19s
    5. PRICEDISC: Calculating the price of a discounted security
      2m 48s
    6. PRICEMAT: Calculating the price of a security that pays interest at maturity
      1m 57s
    7. TBILLEQ: Calculating the bond-equivalent yield for a Treasury bill
      1m 50s
    8. TBILLPRICE: Calculating the price for a Treasury bill
      1m 31s
    9. TBILLYIELD: Calculating the yield of a Treasury bill
      1m 41s
    10. YIELD: Calculating the yield of a security that pays periodic interest
      2m 59s
    11. YIELDDISC: Calculating the annual yield for a discounted security
      2m 9s
    12. YIELDMAT: Calculating the annual yield of a security that pays interest at maturity
      2m 17s
  7. 12m 1s
    1. ODDFPRICE: Calculating the price of a security with an odd first period
      3m 17s
    2. ODDFYIELD: Calculating the yield of a security with an odd first period
      3m 3s
    3. ODDLPRICE: Calculating the price of a security with an odd last period
      2m 44s
    4. ODDLYIELD: Calculating the yield of a security with an odd last period
      2m 57s
  8. 1m 5s
    1. Additional resources
      1m 5s

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