AMORLINC – French straight-line method of depreciation/amortization
Sytanx:
=AMORLINC(cost,date_purchased,first_period,salvage,period,rate,[basis])
cost: cost of the asset
date_purchased: date at which asset was purchased
first_period: date at which first accounting period close
salvage: residual value of asset at the end of its useful life
period: accounting period for which depreciation is to be calculated
rate: rate of depreciation
basis (optional): basis of year or date system to be used for the purpose of calculation.
Basis – Basis of year / Date System / Basis of calender
Basis or basis of year is simply the type of calender used by entity. There are many calender basis in use around the world but the ones Excel supports five of them and they are identified by their respective identifier which is optional to be mentioned in calculation while applying this formula. Summary of identifier and their respective calenders are as follows:
| Basis | Calender |
| 0 or omitted | US 30/360 |
| 1 | Actual number of days |
| 2 | Actual number of days within a month but 360 days year |
| 3 | Actual number of days within a month but 465 days year |
| 4 | European 30/360 days |
Example
Step 1: Open the tab named AMORLINC and observe the data provided
Step 2: In cell B15 put in the following formula:Â =AMORLINC(B7,B8,B9,B10,B11,B12,B13) and hit enter button. This will give you depreciation expense for the data provided.
To practice this method use the following live excel snippet:
Difference between AMORLINC and AMORDEGRC
Both of these methods are almost the same even the syntax of formula is same. However, in AMORDEGRC a hidden calculation on depreciation is done automatically which is basically the depreciation coefficient. Such coefficient is not applied in AMORLINC calculation.
