How to Use the AMORDEGRC Function in Excel

Welcome to the comprehensive guide on using the AMORDEGRC function in Excel and Google Sheets. This function is primarily designed to calculate the depreciation of an asset for a specified accounting period, utilizing the depreciation coefficient approach.

Overview

The AMORDEGRC function is employed to calculate the depreciation of an asset for a certain accounting period. It uses the double-declining balance method, where the depreciation coefficient serves as a multiple of the straight-line depreciation rate.

Syntax

The syntax for the AMORDEGRC function is consistent across both Excel and Google Sheets:

=AMORDEGRC(cost, date_purchased, first_period, salvage, period, rate[, basis])

• cost: The initial cost of the asset.
• date_purchased: The purchase date of the asset.
• first_period: The first period to be considered for depreciation calculation.
• salvage: The residual value of the asset after its expected life.
• period: The specific period for which depreciation is to be calculated.
• rate: The period’s depreciation rate, expressed as a coefficient.
• basis (optional): This argument defines the day count convention to be used and is optional.

Examples

Below are a few examples to illustrate how the AMORDEGRC function can be effectively used:

Example 1

Suppose you purchased an asset for $10,000 on January 1, 2020, with a salvage value of $1,000 and a depreciation rate of 0.2. You need to calculate the depreciation for the third year, assuming the default basis (0).

Example 2

If you wish to apply a non-default day count basis, such as actual/360 (basis 3), you can specify it in the function like this:

These examples demonstrate how the AMORDEGRC function can be used to efficiently calculate asset depreciation in your financial models within Excel or Google Sheets.

More information: https://support.microsoft.com/en-us/office/amordegrc-function-a14d0ca1-64a4-42eb-9b3d-b0dededf9e51