AMORDEGRC

The AMORDEGRC function is used to calculate the prorated depreciation of an asset for a specified accounting period using the coefficient method. This function is commonly used in accounting and financial analysis to determine the depreciation expense on assets over time.

Syntax

=AMORDEGRC(Cost, Date purchase, Date start, Period, [Basis])

Cost The initial cost of the asset.
Date purchase The date when the asset was acquired.
Date start The date when depreciation begins.
Period The period for which depreciation is calculated.
Basis (Optional) The day-count basis to use. Defaults to 0 if omitted.

About AMORDEGRC

When you need to apportion the depreciation of assets and gauge their monetary value over specific accounting periods, the AMORDEGRC function in Excel comes to your aid. This function facilitates the computation of prorated depreciation using the coefficient method, offering a comprehensive solution for tracking the decrease in an asset’s value over time. It proves invaluable in financial assessments and accounting endeavors, providing a reliable means to determine the gradual expense incurred through an asset's depreciation over its useful life span.

To employ the AMORDEGRC function effectively, you input essential details regarding the asset, including its initial cost, the date of acquisition, the commencement date of depreciation, and the specified accounting period for which the depreciation is being calculated. Additionally, you have the option to specify the day-count basis to align with the requisite accounting conventions.

An outstanding feature of AMORDEGRC lies in its adaptability, enabling you to tailor the depreciation assessment to meet specific accounting requirements. Whether it’s allocating the depreciation for tangible assets or assessing the amortization of intangible assets, AMORDEGRC equips you with the necessary tools to accurately compute the prorated depreciation in Excel.

In summary, the AMORDEGRC function stands as an indispensable resource for evaluating the diminution in the value of assets over time. It empowers financial analysts and accounting professionals to deftly navigate the intricacies of asset depreciation, facilitating informed decision-making and precise financial assessments.

Examples

Suppose you acquired a tangible asset for $50,000 on March 1, 2021, and you want to calculate the prorated depreciation for the second year using the coefficient method. The AMORDEGRC formula would be:

=AMORDEGRC(50000, '03/01/2021', '03/01/2021', 2, 0)

This will return the prorated depreciation expense for the specified asset for the second year.

Suppose you acquired an intangible asset for $100,000 on January 1, 2020, and you want to calculate the prorated depreciation for the fourth accounting period using the coefficient method with a 30/360 day-count basis. The AMORDEGRC formula would be:

=AMORDEGRC(100000, '01/01/2020', '01/01/2020', 4, 1)

This will return the prorated amortization expense for the specified intangible asset for the fourth accounting period using a 30/360 day-count basis.

Questions

How does the AMORDEGRC function calculate the prorated depreciation?

The AMORDEGRC function calculates the prorated depreciation using the coefficient method, which involves dividing the depreciable cost by the asset's expected useful life to determine the annual depreciation expense. This expense is then prorated based on the specified accounting period, resulting in the prorated depreciation for that period.

Can the AMORDEGRC function be used for both tangible and intangible assets?

Yes, the AMORDEGRC function can be used for both tangible and intangible assets. It provides a versatile solution for calculating the prorated depreciation and amortization expenses for a wide range of assets, offering flexibility and accuracy in financial assessments.

Can a specific day-count basis be specified in the AMORDEGRC function?

Yes, you can specify a specific day-count basis using the optional Basis argument in the AMORDEGRC function. The default value is 0, which represents the 30/360 day-count basis. You can select other day-count bases, such as actual/actual or actual/360, by providing the appropriate numeric code as the Basis argument.

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DB DDB SLN SYD VDB