Using the French Depreciation Add-in Functions

May 15
07:31

2008

Stephen L Nelson

Stephen L Nelson

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Making French depreciation calculations? Microsoft Excel can help. Excel supplies two add-in functions specifically for making these calculations.

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Excel supplies two special functions for making French depreciation calculations,

AMORDEGRC and AMORLINC.

Both functions use a similar set of arguments,Using the French Depreciation Add-in Functions Articles including the asset cost, purchase date, date at the end of the first period, salvage value, accounting period, depreciation rate, and basis. You specify the basis as 0 for the US (or NASD) version of 30 days in a month and 360 days in a year; as 1 for the actual number of days in the month and year; 2 for the actual number of days in the month but 360 days in a year; 3 for the actual number of days in the month and 365 days in a year; and 4 for the European version of 30 days in a month and 360 days in a year.

Using the AMORDEGRC Function

The AMORDEGRC function uses the following syntax:

AMORDEGRC (cost, purchase date, first period, salvage, period, rate, basis)

For example, if you want to depreciate a piece of equipment purchased on July 15, 2000, for 3,000 French francs, using a salvage value of 600 French francs, a 15% depreciation rate, and the first accounting period ends on December 31, 2000, you use the following formula:

=AMORDEGRC (3000,"7/15/2000","12/31/2000",600,1,0.15,1)

The AMORDEGRC function returns the value 930.

You should know several points before using the AMORDEGRC function:

1. The function uses different coefficients depending on the asset’s estimated life. If the life of the asset falls between three and four years, the function uses a depreciation coefficient equal to 1.5. If the life of the asset falls between five and six years, the function uses a depreciation coefficient equal to 2. If the life of the asset is greater than six years, the function uses a depreciation coefficient equal to 2.5.

2. To fully depreciate an asset, the depreciation rate grows to 50% for the next-to-last period and 100% for the last period.

3. If you specify the estimated economic life of an asset as a non-integer value between 0 and 5—such as 4.5 for example—the AMORDEGRC function returns the #NUM! error value.

Using the AMORLINC Function

The AMORLINC function uses the following syntax:

AMORLINC (cost, purchase date, first period, salvage, period, rate, basis)

For example, if you want to depreciate a piece of equipment purchased on July 15, 2000, for 3,000 French francs, using a salvage value of 600 French francs, a 15% depreciation rate, and the first accounting period ends on December 31, 2000, you use the following formula:

=AMORLINC(3000,"7/15/2000","12/31/2000",600,1,0.15,1)

The function returns the value 450.