Sum of the Years' Digits Depreciation Calculator
Calculate accelerated depreciation using the SYD method
Financial Disclaimer: This calculator provides estimates for informational purposes only. Consult with a qualified accountant or tax professional for official depreciation calculations.
Tip: The SYD method provides higher depreciation expenses in the early years of an asset's life, decreasing over time.
Depreciation Schedule
| Year | Depreciation | Accumulated | Book Value |
|---|
Total Depreciable Amount
$9,000.00
Total Depreciation
$9,000.00
Final Book Value
$1,000.00
Understanding SYD Depreciation
How SYD Works
The sum-of-the-years'-digits method accelerates depreciation by applying a decreasing fraction each year. The fraction's denominator is the sum of the years' digits (for 5 years: 1+2+3+4+5=15). The numerator is the remaining life each year.
When to Use SYD
SYD is ideal for assets that lose more value in early years (e.g., vehicles, technology). It provides larger tax deductions early on when the asset is most productive, matching expense with revenue.
Example Calculation
For a $10,000 asset with 5-year life and $1,000 salvage value:
- Year 1: 5/15 × ($10,000 - $1,000) = $3,000
- Year 2: 4/15 × $9,000 = $2,400
- Year 3: 3/15 × $9,000 = $1,800
- Year 4: 2/15 × $9,000 = $1,200
- Year 5: 1/15 × $9,000 = $600
Total depreciation equals the depreciable amount ($9,000).
Frequently Asked Questions
How does SYD compare to straight-line depreciation?
SYD front-loads depreciation expenses, while straight-line spreads it evenly. SYD results in higher early-year deductions but lower later-year deductions compared to straight-line.
Can SYD be used for tax purposes?
In many jurisdictions, SYD is an acceptable tax depreciation method, but tax laws vary. The MACRS system is more common for U.S. tax purposes. Always consult a tax professional.
What assets are best suited for SYD?
SYD works well for assets with higher productivity in early years that decline over time, such as vehicles, manufacturing equipment, or technology that becomes obsolete quickly.