Depreciation Schedule in Excel: Straight-Line, SLN and DDB Formulas

What you will build

Brightline Trading Co. bought a delivery van for $38,000.00 and started using it on Jan 4, 2026. It expects to use it for five years and sell it for about $6,000.00 at the end. The workbook has two working sheets:

SLN, DDB and the date functions used here work in every version of Excel, including Excel 2010 and later, Microsoft 365 and Excel for the web.

Straight-line vs double declining balance

Both methods expense the same total, cost minus salvage value. They differ in timing:

The key terms: cost is everything you paid to get the asset ready for use, including delivery and setup. Salvage value (or residual value) is what you expect to get for it at the end. Useful life is how long the business expects to use it, not how long it physically lasts. Book value is cost minus accumulated depreciation.

Step 1: Enter the asset details

1. In A2:B2 enter the headers Asset inputs and Value.
2. In A3:B8 enter: Asset Delivery van, Cost 38000, Salvage value 6000, Useful life (yrs) 5, Placed in service 1/4/2026, DDB factor 2.
3. In D3 type Depreciable amount and in E3 enter =B4-B5. It shows $32,000.00, the total that will be expensed over the five years.

Step 2: Straight-line depreciation with SLN

In D4 type Annual straight-line and in E4 enter =SLN(B4,B5,B6). Then build the schedule:

1. In A10:H10 enter the headers Year, Fiscal Year, SLN Depr., SLN Accum., SLN Book Value, DDB Depr., DDB Accum. and DDB Book Value.
2. Row 11 is the starting point: 0 in A11, In service in B11, 0 in D11 and G11, and =$B$4 in E11 and H11.
3. In A12 enter =A11+1 and in B12 enter =YEAR($B$7)+A12-1, which turns year 1 into 2026.
4. In C12 enter the straight-line formula and copy A12:C12 down to row 16:
   Copy

   =SLN($B$4,$B$5,$B$6)

Press F4 to add the dollar signs as you click each input cell. Once the schedule is finished, lock the formula cells so nobody overwrites them by accident.

Step 3: Double declining balance with DDB

In D5 type DDB rate and in E5 enter =B8/B6. With a factor of 2 and a 5-year life, the rate is 40%. In F12 enter the DDB formula and copy it down to F16:

=DDB($B$4,$B$5,$B$6,A12,$B$8)

The fourth argument, A12, is the year you want, so this one is relative and changes as you copy down. The last argument is the factor: 2 for double declining balance, 1.5 for 150% declining balance.

Step 4: Accumulated depreciation and book value

1. In D12 enter =D11+C12, the running total of straight-line depreciation.
2. In E12 enter =$B$4-D12, cost minus accumulated depreciation.
3. Do the same for DDB: =G11+F12 in G12 and =$B$4-G12 in H12.
4. Copy D12:E12 and G12:H12 down to row 16.

Read across any year to compare the methods. At the end of 2026, the van has a book value of 31,600.00 with straight-line but 22,800.00 with DDB. On the balance sheet it appears at cost less accumulated depreciation; with straight-line that is $38,000.00 – $6,400.00 = $31,600.00.

Step 5: Depreciation from in-service dates (asset register)

Real businesses have many assets bought on different dates. The Asset Register sheet calculates the depreciation for one fiscal year from each asset's in-service date, using straight-line and a full-month convention: the month an asset goes into service counts as a full month.

1. Enter the fiscal year end in B2: 12/31/2026.
2. List the assets in rows 5 to 8 with In Service, Cost, Salvage and Life (yrs).
3. In F5, the months in service up to the year end:
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   =MAX(0,(YEAR($B$2)-YEAR(B5))*12+MONTH($B$2)-MONTH(B5)+1)

4. In I5, the accumulated depreciation at year end, capped at cost minus salvage:
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   =ROUND(MIN(C5-D5,(C5-D5)/(E5*12)*F5),2)

5. In G5, the accumulated depreciation at the start of the year: the same formula with MAX(0,F5-12) months.
6. In H5, this year's depreciation: =I5-G5. In J5, the book value: =C5-I5. Copy row 5 down and total row 9.

Step 6: Verify and post the journal entry

1. In C17 and F17 total each method: =SUM(C12:C16) and =SUM(F12:F16). Both should be $32,000.00.
2. In C18 enter the check:
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   =IF(AND(ROUND(C17-E3,2)=0,ROUND(E16-B5,2)=0),"Ties","Check")

   It tests that total depreciation equals the depreciable amount and that the final book value equals salvage. F18 does the same for DDB with F17 and H16.
3. In E6 enter =ROUND(E4/12,2) for the monthly entry (533.33) and in E7 enter =E4-11*E6 for December (533.37), which absorbs the rounding so the year totals exactly 6,400.00.

The schedule is the support for the adjusting entry. Using straight-line, the entry for 2026 is:

Depreciation Expense is an operating expense on the monthly profit and loss statement. Accumulated Depreciation is a contra-asset on the balance sheet, so the van's cost stays at $38,000.00 and the book value falls as the allowance grows. Because depreciation is not a cash payment, add it back when you build a cash flow forecast from profit.

Book depreciation vs tax depreciation

This schedule is book depreciation, for your financial statements. Tax depreciation follows its own rules. In the US that means MACRS recovery periods and conventions, plus elections such as Section 179 and bonus depreciation, and Excel's DDB function does not reproduce MACRS tables. Keep a separate tax schedule, and expect the two to differ: the difference is a timing difference that reverses over the asset's life. Other countries have their own capital allowance rules, so check them with your tax adviser.

Common mistakes and quick fixes

Frequently asked questions

Final checklist

• Cost includes delivery and setup, and the in-service date is a real date.
• Salvage value and useful life are reasonable estimates you can support.
• SLN and DDB inputs are locked with dollar signs; the DDB period is relative.
• Book value never falls below salvage, and total depreciation equals cost minus salvage.
• The asset register uses one convention for every asset.
• Monthly entries are rounded, with the last month absorbing the difference.
• Book depreciation is kept separate from tax depreciation.

Depreciation shows up across the month-end series: as an operating expense in the monthly P&L, as a fixed cost in a break-even analysis, and next to the loan amortization schedule when the asset was financed. The van in this example is the kind of equipment that loan pays for.