AMORDEGRC Excel Formula

Author Zaheer    Category Formulas     Tags , ,

Microsoft Excel has become very well known among businesses that some even used it as a job requirement when hiring for people for an administrative or accounting position. In other words, Excel is essential in the workplace. Learning MS Excel is now incorporated in the accounting curriculum in college where students learn to make accounting files professionally that can be presented to upper stockholders and management.

Learning to utilize the built-in formulas in Microsoft Excel significantly decreases the manipulation and accounting data input time. User can now perform calculations like income statements, cost accounting and payroll in just a couple of seconds with the use of an Excel spreadsheet with macros and formulas that are already built-in. One of the accounting functions in Excel is the AMORDEGRC function. So, if you are interested with this function, then it is better for you to read this article since it will provide you an overview of the AMORDEGRC function and an example on how to use it which is a good start in learning.

Definition of AMORDEGRC Function in Microsoft Excel

The AMORDEGRC function in Excel is used to compute for the prorated linear depreciation of an asset for every accounting period. In this function, a depreciation coefficient is used which depends on the life of the asset. The AMORDEGRC function has been brought into Excel for those users of the French accounting system. The formula of this function is:

AMORDEGRC (cost, date_purchased, first_period, salvage, period, rate, [basis])

The arguments in this formula are the following:

  • Cost – This argument specifies the cost of the asset
  • Date_purchased – The date when the asset was purchased
  • First_period – The date when the first period will end
  • Salvage – This argument is the salvage value, at the end of the asset’s life
  • Period – This refers to the number of period over which the depreciation is to computed
  • Rate – The rate of depreciation of the asset
  • [basis] – This is an optional argument. This argument indicates the daily basis that will be used in the calculation. The following are the possible values of this argument and their meaning:

0 (or omitted) – US (NASD) 30/360

  •  actual/actual
  •  actual/360
  •  actual/365
  •  European 30/360]

You have to take note that the date arguments can be supplied in the formula as either of the following:

  • Dates that are returned from other formulas or functions
  • Cell references which contain the dates

If these dates are supplied as content, there is a possibility that Excel may not understand this because of different date interpretation settings and date systems.

Even though these dates can also be supplied as sequential numbers, this is not suggested because serial numbers differ across various computer systems.

Let’s take a look at this example to learn more about the usage of the AMORDEGRC function. For instance, the purchase date of the asset is 01-Jan-2011, at a cost of $150 and the end date of the first period is on 30-Sep-2011. The asset has a salvage value of $20 and downgrade at a rate of 20% per year. The day count basis that is used is the US (NASD) 30/360.

If you will use the AMODEGRC function formula and type in all the values that were given above, the function will return the result which is 42. It means that the asset depreciates by $42.00 during the initial period.

1 Comment to “AMORDEGRC Excel Formula”

  • Heng sorin April 30, 2012 at 5:11 am

    How to use function of AMORDEGRC in Excel for first year and after year?
    tell me too and how to calculate by hand?

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