AccountancyCBSE Class 12 · Use of Spreadsheet in Business Applications

Asset Accounting in a Spreadsheet: Depreciation Schedules with SLN and DB (Class 12)

Updated 15 October 2026 · Fact-checked

In spreadsheet asset accounting, straight-line depreciation is =SLN(cost, salvage, life), giving the same charge every year, and written-down-value depreciation is =DB(cost, salvage, life, period, [month]), which finds a fixed rate and applies it to the opening book value each year. Cost means cost to use: purchase price plus transport, installation and pre-operating expenses.

SLN charges the same amount every year, while DB applies a fixed rate of 0.369 to a shrinking book value, so charges start high and fall.

Illustration drawn for QuestionBuddy.

Understand Depreciation Schedule with SLN and DB

Asset register. A spreadsheet asset register lists each asset with date of purchase and installation, cost, salvage value, useful life and depreciation, grouped into categories (land and buildings, plant and machinery, furniture, vehicles and so on).

Key terms.

Cost to use (acquisition cost) = purchase price + transport + installation + pre-operating expenses.
Salvage value: expected realisable value at the end of useful life.
Depreciable amount = cost to use − salvage value.

1. Straight line method: =SLN(cost, salvage, life). Depreciation = (cost − salvage) ÷ life, the same every full year. Example: =SLN(500000, 50000, 9) = ₹50,000.

2. Written down value (declining balance): =DB(cost, salvage, life, period, [month]).

Excel works out the fixed rate itself: rate = 1 − (salvage ÷ cost)^(1/life), rounded to three decimals.
Depreciation for a period = book value at the start of that period × rate.
period: the year for which depreciation is required (1, 2, 3 ...).
month: months the asset was used in the first year (12 if omitted). First year depreciation = cost × rate × month/12; the remaining part of the last period is charged in period life + 1.
Example: cost ₹1,00,000, salvage ₹10,000, life 5: rate = 0.369; year 1 = 36,900; year 2 = 63,100 × 0.369 = 23,283.90.

Part-year handling in the NCERT approach. IF, YEAR, MONTH and DATE functions compute how many months the asset was used in the first year (for example, an asset installed in October is used for 6 months to 31st March), and that figure feeds the month argument or a pro-rata SLN charge.

SLN vs DB. SLN charges equal amounts; DB charges more in early years and less later, so book value falls fast at first.

Depreciation Schedule with SLN and DB: key facts

Cost to use: Purchase price + transport + installation + pre-operating expenses
SLN: =SLN(cost, salvage, life) = (cost − salvage) ÷ life
DB rate: 1 − (salvage ÷ cost)^(1/life), rounded to 3 decimals; Calculated by Excel inside DB.
DB charge: =DB(cost, salvage, life, period, [month]) = opening book value × rate; First year × month/12 if month is given.
Book value: Cost to use − accumulated depreciation

How to answer Depreciation Schedule with SLN and DB questions

Depreciation questions ask for syntax, a value, or a short schedule. Always find cost to use first.

1Add purchase price and all costs of bringing the asset into use: cost to use.
2Identify salvage value and useful life.
3SLN: (cost − salvage) ÷ life; write =SLN(...) with cell references.
4DB: find the rate (1 − (salvage/cost)^(1/life)), round to three decimals, apply to each year's opening book value.
5For part-year use, apply month/12 in the first year.
6Build the schedule: year, opening book value, depreciation, closing book value.

Depreciation Schedule with SLN and DB in real life

The idea, met in an everyday situation. Answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Cost to use and SLN

Suppose a bakery buys an oven for ₹8,00,000, pays ₹40,000 for transport and ₹10,000 for installation and a test run. It expects to use the oven for 8 years and sell it for scrap at ₹50,000.

Calculate the annual straight-line depreciation and write the spreadsheet formula.

Try it first, then show the solutionSolution

Cost to use = 8,00,000 + 40,000 + 10,000 = ₹8,50,000.
Depreciable amount = 8,50,000 − 50,000 = 8,00,000.
=SLN(850000, 50000, 8) = ₹1,00,000 per year.

Answer: ₹1,00,000 a year, from =SLN(850000, 50000, 8). Transport and installation are part of the asset's cost, so they are depreciated with it, not expensed at once.

Memory hook: Everything spent to make it work is part of its cost.

Tricks to remember Depreciation Schedule with SLN and DB

Short memory aids. Say each one aloud once, then use it on a question the same day.

SLN = C-S-L
Cost, Salvage, Life: three arguments, one division.
Use it when: SLN syntax.
DB = C-S-L-P-M
DB adds Period and optional Month to SLN's three.
Use it when: DB syntax.
Three-decimal rate
DB rounds its rate to three decimals, so the final book value lands near, not exactly on, salvage.
Use it when: Explaining small differences.

Depreciation Schedule with SLN and DB: solved examples

Ordered from board level to HOTS. Try each one before you open the solution.

Example 1: SLN value · 1 mark · MCQBoard level

=SLN(500000, 50000, 9) returns:
(a) ₹55,556
(b) ₹50,000
(c) ₹45,000
(d) ₹5,000

Try it first, then show the solutionSolution

(5,00,000 − 50,000) ÷ 9 = 50,000.

Answer: (b) ₹50,000

Example 2: Cost to use and SLN · 3 marks · Short answerBoard level

A machine is bought for ₹3,00,000; freight ₹15,000 and installation ₹5,000 are paid. Salvage value is ₹20,000 and life 10 years. Write the SLN formula and find annual depreciation. (3 marks)

Try it first, then show the solutionSolution

Cost to use = 3,00,000 + 15,000 + 5,000 = 3,20,000.
=SLN(320000, 20000, 10).
= 3,00,000 ÷ 10 = ₹30,000.

Answer: ₹30,000 per year.

Example 3: DB rate and first two years · 3 marks · Short answerHarder board level

An asset costs ₹1,00,000, salvage value ₹10,000, life 5 years. Find the rate DB uses and the depreciation for years 1 and 2 using =DB(100000, 10000, 5, 1) and =DB(100000, 10000, 5, 2). (3 marks)

Try it first, then show the solutionSolution

Rate = 1 − (10,000/1,00,000)^(1/5) = 1 − 0.631 = 0.369.
Year 1 = 1,00,000 × 0.369 = 36,900.
Year 2 = (1,00,000 − 36,900) × 0.369 = 23,283.90.

Answer: Rate 36.9%; ₹36,900 and ₹23,283.90.

Example 4: Part-year with the month argument · 4 marks · Short answerHarder board level

The asset above (cost ₹1,00,000, salvage ₹10,000, life 5) was used for 9 months in its first accounting year. Find depreciation for years 1 and 2 using DB with month = 9. (4 marks)

Try it first, then show the solutionSolution

Rate = 0.369.
Year 1 = 1,00,000 × 0.369 × 9/12 = 27,675.
Year 2 = (1,00,000 − 27,675) × 0.369 = 72,325 × 0.369 ≈ 26,687.93.

Answer: Year 1 ₹27,675; year 2 about ₹26,688. The remainder of the last year is charged in period 6.

Example 5: SLN or DB? · 1 mark · Assertion-reasonHOTS / competency

Assertion (A): Under =DB, depreciation is highest in the first year and falls every year.
Reason (R): DB applies a fixed rate to a book value that keeps falling.
(a) Both A and R are true, and R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is true, but R is false.
(d) A is false, but R is true.

Try it first, then show the solutionSolution

A full-year DB charge equals rate × opening book value; since book value falls, so does the charge. (With a part first year, year 2 can exceed year 1.) R explains A for full years.

Answer: (a) Both A and R are true, and R is the correct explanation of A.

Where students lose marks in Depreciation Schedule with SLN and DB

The slips examiners see most often, and what to write instead.

Mistake: Leaving out installation and freight
Using only the invoice price.
Wrong working
=SLN(300000, 20000, 10) = 28,000.
Right working
=SLN(320000, 20000, 10) = 30,000.
Do this: Use cost to use.
Usually costs: 1 mark.
Mistake: Applying DB's rate to cost every year
Mixing up with straight line.
Wrong working
Year 2 = 1,00,000 × 0.369.
Right working
Year 2 = 63,100 × 0.369.
Do this: DB uses opening book value.
Usually costs: 1 mark.
Mistake: Wrong argument order
Guessing syntax.
Wrong working
=SLN(cost, life, salvage)
Right working
=SLN(cost, salvage, life)
Do this: C-S-L.
Usually costs: 1/2 mark.
Mistake: Ignoring the month argument for part years
Charging a full year.
Wrong working
Year 1 = 36,900 for 9 months' use.
Right working
Year 1 = 36,900 × 9/12 = 27,675.
Do this: Use month in DB or pro-rate SLN.
Usually costs: 1 mark.

Exam tips

Show cost to use as a working line before any formula.
Write formulas exactly with argument order.
For DB, show the rate calculation; it earns marks even if arithmetic slips.
Financial functions (SLN, DB, PMT) are the most asked items in this chapter.

Practice questions on Depreciation Schedule with SLN and DB

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

Q1 · 1 mark · MCQBoard level
The correct syntax of the straight-line depreciation function is:
(a) =SLN(cost, life, salvage)
(b) =SLN(cost, salvage, life)
(c) =SLN(salvage, cost, life)
(d) =SLN(life, cost, salvage)
Hint
C-S-L.
Answer
(b) =SLN(cost, salvage, life)
Q2 · 1 mark · MCQBoard level
Cost to use of an asset includes:
(a) purchase price only
(b) purchase price plus transport and installation
(c) purchase price less salvage value
(d) salvage value only
Hint
Everything to make it usable.
Answer
(b) purchase price plus transport and installation
Q3 · 3 marks · Short answerHarder board level
An asset costing ₹2,00,000 has a salvage value of ₹20,000 and a life of 4 years. Find the DB rate and depreciation for years 1 and 2. (3 marks)
Hint
(0.1)^(1/4) ≈ 0.562.
Answer
Rate = 1 − (20,000/2,00,000)^(1/4) = 0.438. Year 1 = 87,600; year 2 = (2,00,000 − 87,600) × 0.438 = 49,231.20.
Q4 · 3 marks · Short answerHarder board level
A machine with annual SLN depreciation of ₹50,000 was installed on 1st October and the year ends on 31st March. What depreciation is charged in the first year, and how would a spreadsheet find the months? (3 marks)
Hint
6 months.
Answer
6 months' use: 50,000 × 6/12 = ₹25,000. The sheet can compute months with date functions (for example, using MONTH of the installation date and an IF to decide the first year-end) and multiply SLN by months/12.
Q5 · 3 marks · Short answerHarder board level
List the columns of a spreadsheet asset register for depreciation. (3 marks)
Hint
Inputs and outputs.
Answer
Asset name/group, date of purchase/installation, purchase price, other costs, cost to use, salvage value, useful life, depreciation for the year (SLN or DB), accumulated depreciation and closing book value.
Q6 · 1 mark · Assertion-reasonHarder board level
Assertion (A): =SLN gives the same depreciation every full year.
Reason (R): It divides the depreciable amount equally over the useful life.
(a) Both A and R are true, and R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is true, but R is false.
(d) A is false, but R is true.
Hint
Equal shares.
Answer
(a) Both A and R are true, and R is the correct explanation of A.
Q7 · 3 marks · Short answerHOTS / competency
After five years of DB depreciation on an asset costing ₹1,00,000 (salvage ₹10,000, life 5), the book value is ₹10,003.38, not exactly ₹10,000. Explain why. (3 marks)
Hint
Rounding of the rate.
Answer
DB rounds its rate to three decimals (0.369 instead of 0.36904...). The slightly lower rate leaves a slightly higher book value after five years, so it ends near, not exactly at, the salvage value.
Q8 · 4 marks · Short answerHOTS / competency
Suppose a firm must choose between SLN and DB for computers that lose value fast in early years. Which suits better and why? Show year 1 charges for a computer costing ₹1,00,000 with salvage ₹10,000 and life 5. (4 marks)
Hint
Match the charge to the loss of value.
Answer
SLN year 1 = (1,00,000 − 10,000) ÷ 5 = ₹18,000; DB year 1 = ₹36,900. DB suits computers better because it charges more depreciation early, when their usefulness and market value fall fastest.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

1.Arguments of SLN?Show answer
cost, salvage, life.
2.Arguments of DB?Show answer
cost, salvage, life, period, [month].
3.How does DB find its rate?Show answer
1 − (salvage ÷ cost)^(1/life), rounded to three decimals.
4.Cost to use includes?Show answer
Purchase price, transport, installation and pre-operating expenses.
5.Which method charges more in early years?Show answer
DB (written down value).

Depreciation Schedule with SLN and DB: frequently asked questions

What is the SLN function?

A spreadsheet function giving straight-line depreciation per period: (cost − salvage) ÷ life.

How does the DB function work?

It computes a fixed rate from cost, salvage and life and applies it to the book value at the start of each period, with an optional month argument for the first year.

Why include installation in cost?

Costs needed to bring the asset into working condition are part of its cost and are depreciated over its life.

Is payroll accounting in this chapter's syllabus?

No. The 2026-27 syllabus names bank reconciliation, asset accounting, loan repayment schedules and ratio analysis.