MS Excel: AMORLINC function for depreciation

The AMORLINC function in Excel calculates the linear (straight-line) depreciation of an asset for each accounting period.Unlike AMORDEGRC, which uses accelerated depreciation, AMORLINC spreads the asset's value loss evenly over its useful life.

It is especially used in French accounting, but also useful anywhere straight-line depreciation is needed with fixed-period calculations.

Syntax

AMORLINC(cost, date_purchased, first_period_end, salvage, period, rate, [basis])

Argument	Description
cost	Initial purchase cost of the asset.
date_purchased	The date the asset was purchased.
first_period_end	The end date of the first accounting period.
salvage	The value of the asset after full depreciation (residual value).
period	The accounting period for which you want to calculate depreciation.
rate	Depreciation rate per year.
basis (Optional)	Day count basis (default is 0 – US (NASD) 30/360).

Key Points

• Calculates equal depreciation each period (straight-line method).

• Useful for simple asset tracking.

• Period specifies which period’s depreciation you want to calculate.

• Can handle partial periods (e.g., if an asset is bought mid-year).

Practical Example

Suppose you buy a computer on March 1, 2024, for $5,000.The expected salvage value is $500, and you want to depreciate it over 5 years at a 20% annual rate.You are calculating depreciation for the first year.

The end of the first accounting period is December 31, 2024.

The formula:

=AMORLINC(5000, DATE(2024,3,1), DATE(2024,12,31), 500, 1, 0.2)

Result: Depreciation amount for the first year (taking into account the asset was not held the entire year).

Summary

Item	Value
Cost	$5,000
Purchase Date	01-Mar-2024
First Period End	31-Dec-2024
Salvage Value	$500
Depreciation Rate	20%
Period	1
Basis	0 (30/360)

Important Notes

• If the salvage value is greater than the cost, Excel will return a #NUM! error.

• If rate ≤ 0 or if any dates are invalid (e.g., settlement before purchase), Excel returns an error.

• Be mindful of basis if you need exact day counts (e.g., 30/360 vs. actual/actual).

When to Use AMORLINC?

• For straight-line depreciation tracking.

• For accounting systems where equal depreciation per period is required.

• For small businesses managing simple assets (vehicles, office equipment).

Conclusion

The AMORLINC function is a reliable tool for evenly distributing asset costs over their useful life.It helps accountants, financial analysts, and business owners to accurately record asset depreciation with minimal complexity.