Exceltemplates.org – Depreciation Calculator is a method of counting the value of an asset that you have invested in regarding the fact that through the years the value of an item tends to decrease. Some of the reasons that cause this reduction are: time and newer versions of the item you have. In time, tires of a car can wear out, the durability of a machine can also reduce and the also, newer versions of either a car or a machine are released into the market making yours obsolete. The Depreciation Calculator calculates this margin and is usually used for accounting reports in general.
The word depreciation was first used in the 1700’s meaning the lowering of currency value. However over time, this term developed into larger areas. Noted as of the 1900’s the term depreciation applied also to goods and assets, meaning the loss of value of a durable good by age or year. The Depreciation Calculator therefore means to calculate the inevitable loss of value from goods that are caused by aging or it being obsolete in the market.
Using the Excel Template for Depreciation Calculator
Calculating depreciation values of your goods is easiest when using an excel sheet as the formulas are already prepared. Start with the type of item in your inventory: a mobile phone for example. Enter you investment cost as well as the amount salvaged. The table on your right will calculate the debit amount, the total and book value of your item. The book value will go to your reports whereas the total reflects the margin of to the initial value and the depreciation margin. There are three methods of calculating depreciation: straight line, sum of year digits and the declining balance. It is important to determine this in advance to make sure you retrieve the results you need.
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