A to Z of Excel Functions: The AMORDEGRC Function

Welcome back to our regular A to Z of Excel Functions blog.  Today we look at the AMORDEGRC function.

The AMORDEGRC function

We thought we’d add a European flavour to today’s blog, a little je ne sais quoi.  This function returns the depreciation for each accounting period in accordance with the French accounting system.  If an asset is purchased in the middle of the accounting period, the pro-rated depreciation is taken into account.  The function is similar to AMORLINC (coming soon), except that a depreciation coefficient is applied to the calculation depending on the life of the assets.

The AMORDEGRC function employs the following syntax:

Important: Dates should be entered by using the DATE function, or as results of other formulas or functions.  For example, use DATE(2016,5,23) for the 23rd day of May, 2016. Problems can occur if dates are entered as text instead.

The AMORDEGRC function syntax has the following arguments:

• cost: this is required.  This represents the cost of the asset
• date_purchased: also required.  The date of the purchase of the asset
• first_period: required.  The date of the end of the first period
• salvage: required.  The salvage value at the end of the life of the asset
• period: required.  The period in question
• rate: required.  The rate of depreciation
• basis: optional.  The year basis to be used.

Some notes to remember on how the basis argument works (there’s no number 2):

Remarks:

• Microsoft Excel stores dates as sequential serial numbers so they can be used in calculations.  By default, January 1, 1900 is serial number 1, and January 1, 2008 is serial number 39448 because it is 39,448 days after January 1, 1900
• This function will return the depreciation until the last period of the life of the assets or until the cumulated value of depreciation is greater than the cost of the assets minus the salvage value
• The depreciation coefficients are:

• The depreciation rate will grow to 50% for the period preceding the last period and will grow to 100% for the last period
• If the life of assets is between 0 (zero) and 1, 1 and 2, 2 and 3, or 4 and 5, the #NUM! error value is returned.

Please see my example below:

We’ll continue our A to Z of Excel Functions soon.  Keep checking back – there’s a new blog post at least every other business day.