# Depreciation in Excel: SLN, DB, DDB, SYD, and the One That Actually Reaches Salvage

Excel has five depreciation functions and one of them quietly leaves $510 of an $85,000 machine undepreciated. Here is the same asset through all of them, side by side, plus which one matches the tax method you probably need.

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- **Canonical URL:** https://dothecalculation.com/blog/templates/excel-depreciation-sln-db-ddb-syd
- **Category:** Templates
- **Author:** Do The Calculation Team
- **Published:** 2026-08-03
- **Reading time:** 11 min read
- **Publisher:** Do The Calculation (https://dothecalculation.com)
- **Methodology:** https://dothecalculation.com/methodology

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## Five Functions, One Asset

Excel ships SLN, SYD, DB, DDB, and VDB. They all spread the same cost across the same life, and they disagree about year one by more than a factor of two. Choosing between them is an accounting decision, not a formula preference.

One of them has a trap worth knowing before you use it: DDB does not necessarily depreciate the asset down to its salvage value, and it does not warn you.

Tool: [Try the depreciation calculator](https://dothecalculation.com/calculators/depreciation-calculator) — Generate a schedule under any of the standard methods without building the sheet first.

## The asset

**Inputs, named at the top of the sheet**
| Name | Value |
| --- | --- |
| Cost | $85,000 |
| Salvage | $8,000 |
| Life | 8 years |
| Depreciable base | $77,000 |

## What each function does

**The five functions**
| Function | Syntax | Pattern |
| --- | --- | --- |
| SLN | =SLN(cost, salvage, life) | Equal every year |
| SYD | =SYD(cost, salvage, life, per) | Accelerated, smooth decline |
| DB | =DB(cost, salvage, life, per, [month]) | Fixed-rate declining balance |
| DDB | =DDB(cost, salvage, life, per, [factor]) | Double declining balance |
| VDB | =VDB(cost, salvage, life, start, end, [factor], [no_switch]) | Declining, switching to straight line |

SLN takes no period argument because every year is the same. The other four do, and the period is a whole year unless you are using DB with a month argument or VDB with fractional start and end values.

## The same asset, four ways

**Annual depreciation on $85,000, $8,000 salvage, 8 years**
| Year | SLN | SYD | DDB | VDB with switch |
| --- | --- | --- | --- | --- |
| 1 | $9,625 | $17,111 | $21,250 | $21,250 |
| 2 | $9,625 | $14,972 | $15,938 | $15,938 |
| 3 | $9,625 | $12,833 | $11,953 | $11,953 |
| 4 | $9,625 | $10,694 | $8,965 | $8,965 |
| 5 | $9,625 | $8,556 | $6,724 | $6,724 |
| 6 | $9,625 | $6,417 | $5,043 | $5,043 |
| 7 | $9,625 | $4,278 | $3,782 | $3,782 |
| 8 | $9,625 | $2,139 | $2,837 | $3,346 |
| Total | $77,000 | $77,000 | $76,490 | $77,000 |

> **The DDB total is $510 short** — DDB applies a fixed percentage to a shrinking book value, so it approaches salvage asymptotically and never quite arrives. Excel stops it going below salvage but does nothing to make it reach salvage. On this asset $509.60 is left undepreciated, and nothing in the sheet tells you.

VDB fixes this. Its last argument, no_switch, defaults to FALSE, meaning it switches to straight line on the remaining book value whenever straight line would give a larger deduction. On this asset that happens only in year eight: $3,346 rather than $2,837, and the schedule lands exactly on $8,000.

**The formula for each column**

```
SLN: =SLN(Cost, Salvage, Life)    ·    SYD: =SYD(Cost, Salvage, Life, A2)    ·    DDB: =DDB(Cost, Salvage, Life, A2)    ·    VDB: =VDB(Cost, Salvage, Life, A2-1, A2)
```
- A2 holds the year number, so the formulas copy down without editing.
- VDB takes a start and an end period rather than a single period, which is why it needs A2-1 and A2.
- Passing TRUE as the seventh VDB argument disables the switch and reproduces DDB, including its shortfall.

## DB, and why its answer differs from DDB

DB does not use a factor. It derives its own rate from the ratio of salvage to cost, then rounds that rate to three decimal places.

**The rate DB computes for itself**

```
Rate = 1 − (salvage ÷ cost)^(1 ÷ life), rounded to 3 decimals
```
- 1 − (8,000 ÷ 85,000)^(1÷8) = 1 − 0.7443 = 0.2557, rounded to 0.256
- Year one: 85,000 × 0.256 = $21,760
- Because the rate is derived from salvage, DB does land close to salvage, with a small rounding drift.

> **The DB month argument creates a ninth year** — Passing a month argument prorates the first year, which pushes the remainder into an extra period. An 8-year asset placed in service in month 7 needs nine rows in the schedule, not eight. Omitting the argument entirely assumes a full first year.

## Choosing a method

**What each method is for**
| Method | Use when | Effect |
| --- | --- | --- |
| SLN | Book reporting, simple assets, buildings | Smooth, predictable, easy to explain |
| SYD | The asset genuinely loses value fastest early | Accelerated without the salvage problem |
| DDB | Modelling a rapid write-down, matching a policy | Fastest early deduction, may miss salvage |
| DB | Matching a fixed-percentage policy | Derives its own rate, close to salvage |
| VDB | Anything mirroring a tax declining-balance system | Accelerated and lands exactly on salvage |

For most modelling work the honest default is VDB with the switch enabled, because it is the only accelerated method that both front-loads the deduction and reaches the salvage value exactly. Use SLN when the audience needs a number they can verify in their head.

## The full schedule

**A schedule with running book value**
| Column | Header | Formula in row 2 |
| --- | --- | --- |
| A | Year | 1 |
| B | Opening book value | =Cost |
| C | Depreciation | =VDB(Cost, Salvage, Life, A2-1, A2) |
| D | Accumulated | =C2 |
| E | Closing book value | =B2-C2 |

Row 3 changes three cells: opening book value becomes =E2, and accumulated becomes =D2+C3. Copy down for the life of the asset. The final closing book value must equal the salvage value, and if it does not, you are using DDB.

**A check formula worth adding**

```
=IF(ROUND(E9, 2)=ROUND(Salvage, 2), "OK", "Does not reach salvage")
```
- Place it beside the last row of the schedule.
- It catches the DDB shortfall, an off-by-one in the life, and a mistyped salvage value.
- ROUND to two decimals avoids a false alarm from floating point noise.

## Partial years

VDB is the only one of the five that handles fractional periods natively, because it takes a start and an end rather than a period number. An asset placed in service on 1 October has three months in its first fiscal year: =VDB(Cost, Salvage, Life, 0, 0.25).

For the second year, the range runs from 0.25 to 1.25, and so on. This does mean the schedule has one more row than the asset has years of life, which is correct rather than an error.

## What these functions do not do

- None of them is a tax calculation. Tax depreciation follows statutory class lives, conventions, and elections that differ by jurisdiction and by year, and no Excel function encodes any of that.
- They do not implement the half-year or mid-quarter conventions that many tax systems require in the first and last year. You can approximate those with VDB and fractional periods, but the classification decisions are yours.
- They ignore immediate expensing elections, bonus depreciation, and any cap on deductions, all of which usually matter more than the method.
- They assume salvage value is known. In practice it is an estimate, and revising it partway through the life requires recomputing the remaining schedule rather than adjusting a formula.
- They say nothing about impairment. An asset that loses value suddenly needs a write-down, which no depreciation schedule anticipates.
- Book and tax depreciation commonly differ on purpose, and a model usually needs both schedules with the difference tracked between them.

**Why does my DDB schedule not reach the salvage value?**

Because declining balance applies a fixed percentage to a shrinking base, which approaches zero without arriving. Excel clamps DDB so it never goes below salvage, but nothing pushes it up to salvage. Use VDB with the switch enabled if the schedule must land exactly.

**What is the difference between DB and DDB?**

DDB uses a factor you supply, defaulting to 2, applied as factor divided by life. DB derives its own rate from the salvage-to-cost ratio and rounds it to three decimals. DDB is a policy choice; DB is fitted to the salvage value you specified.

**How do I model a half-year convention?**

Use VDB with fractional periods. The first year runs from 0 to 0.5, the second from 0.5 to 1.5, and so on, with a final half period at the end. The schedule will have one more row than the stated life, which is expected under that convention.

**Which method gives the biggest first-year deduction?**

DDB, at $21,250 on this asset, against $17,111 for SYD and $9,625 for straight line. VDB with a factor of 2 matches DDB in the early years and only diverges once straight line on the remaining balance becomes larger.

**Can I depreciate to zero salvage value?**

Yes for SLN, SYD, and VDB. DDB and DB both misbehave with a zero salvage: DDB never reaches zero, and DB computes a rate of 1 minus zero to a power, which produces a 100% first-year rate. Use VDB if the asset genuinely has no residual value.

**Do these functions work in Google Sheets?**

All five exist with the same names and arguments. The only practical difference to watch is that named ranges behave slightly differently across sheets, so check the references if you move a workbook between the two.

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_Source: [Do The Calculation](https://dothecalculation.com/blog/templates/excel-depreciation-sln-db-ddb-syd). Quote freely with attribution and a link to this page._