AMORLINC
The AMORLINC function calculates prorated depreciation for an asset in a specific accounting period using the linear method. It considers asset cost, purchase date, and end of period. Useful for financial analysis and asset management.
Syntax 🔗
=AMORLINC(Cost, Date purchased, First period, Salvage, Period, Rate, [Basis])
Cost | The initial cost of the asset. |
Date purchased | The date when the asset was purchased. |
First period | The start date of the first period. |
Salvage | The value of the asset at the end of its useful life. |
Period | The accounting period for which you want to calculate the depreciation. |
Rate | The annual depreciation rate. |
Basis (Optional) | The day-count basis to use. Defaults to 0 if omitted. |
About AMORLINC 🔗
The AMORLINC function in Excel helps you allocate the depreciation of an asset over specific accounting periods using the linear depreciation method. This function calculates prorated depreciation, ensuring accurate financial representation and compliance with accounting principles. It's useful for managing and reporting asset depreciation systematically, aiding in financial analysis and decision-making. By entering details like the asset's initial cost, purchase date, depreciation rate, salvage value, and the target accounting period, the AMORLINC function provides the prorated depreciation amount, supporting your asset management and financial planning.
Examples 🔗
Assuming an asset was purchased for $10,000 with a salvage value of $1,000, and the annual depreciation rate is 20%. If you want to calculate the prorated depreciation for the first year, starting from the purchase date of January 1, 2022, the AMORLINC formula would be: =AMORLINC(10000, "01/01/2022", "01/01/2022", 1000, 1, 0.20)
Suppose a business acquires an asset for $25,000, with a salvage value of $5,000. The asset was purchased on April 15, 2021, and the annual depreciation rate is 15%. If you need to assess the prorated depreciation for the second year, commencing on April 15, 2022, the AMORLINC formula would be: =AMORLINC(25000, "04/15/2021", "04/15/2022", 5000, 2, 0.15)
Notes 🔗
Use the AMORLINC function with valid Excel date values or references to cells containing valid date values. This function applies a linear depreciation method, meaning the depreciation amount remains constant each period. Adjust the function parameters to match the asset's specific details and accounting period for precise results.
Questions 🔗
The linear depreciation method, employed by the AMORLINC function, evenly allocates the depreciation of an asset over its useful life, resulting in a constant depreciation amount for each accounting period. This approach ensures a systematic and predictable reduction in the asset's value over time.
Can the AMORLINC function handle assets with different depreciation methods?No, the AMORLINC function is designed specifically for assets using the linear depreciation method. It calculates prorated depreciation based on a constant annual rate over the asset's useful life.
Is the salvage value a crucial factor in the AMORLINC function's calculation?Yes, the salvage value of the asset plays a pivotal role in the AMORLINC function's calculation. It represents the estimated residual value of the asset at the end of its useful life and influences the amount of depreciation allocated to each accounting period.
Can the AMORLINC function accommodate different day-count bases for the calculation?Yes, the AMORLINC function allows for the specification of a different day-count basis using the optional Basis argument. This enables users to tailor the depreciation calculation to various day-count conventions, providing flexibility in the accounting treatment of asset depreciation.