AMORLINC in Google Sheets

What Is AMORLINC Function in Google Sheets?

The AMORLINC function in Google Sheets calculates the depreciation of an asset for an accounting period using a linear depreciation model, as defined in the French accounting system. It considers the prorated depreciation in case the asset was purchased in the middle of an accounting period. The linear depreciation model is widely used to calculate the depreciation for tangible assets.

We often use the SLN (Straight Line Depreciation) function in Google Sheets for calculations. However, we use AMORLINC as it returns the prorated depreciation if we purchase an asset in the middle of a period. For instance, an asset for $1000 was purchased on January 1, 2024. The first period ends on December 31, 2024. The asset has a salvage value of $100 and a depreciation rate of 10% (0.1). We find the depreciation for 2024 using AMORLINC as:

=AMORLINC(1000, “1/1/2024”, “12/31/2024”, 100, 1, 0.1).

We get a value of $100.

Syntax

Now, let us look at the AMORLINC in Google Sheets formula to understand the details required to use the function. It is as follows.

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

Arguments

1. Cost – The purchase cost of the asset.
2. purchase_date   – The date when we purchase the asset. It should be a valid date.
3. first_period_end – End date of the first depreciation period.
4. salvage  – Residual value of the asset at the end of its life.
5. period    – The period for which to calculate depreciation (0 = first period, 1 = second, and so on)
6. rate – The annual depreciation rate, expressed as a decimal.
7. basis (optional argument) – It specifies the day count convention to use for calculating dates.

Basis	Description
0	US (NASD) 30/360 (default)
1	Actual/actual
2	Actual/360
3	Actual/365
4	European 30/360

How To Use AMORLINC Function in Google Sheets?

AMORLINC is an important function used to calculate the depreciation for each accounting period using a linear depreciation method. Let us see how to use AMORLINC in Google Sheets in two ways.

1. Enter AMORLINC manually
2. Enter through the Google menu

Enter AMORLINC Manually

Here’s a step-by-step guide on how to manually enter the AMORLINC function in Google Sheets. Let us study it with a basic example. We must enter the details shown below in a Google Sheet.

• Asset cost: $10,000
• Purchase date: Jan 1, 2024
• First period ends: Dec 31, 2024
• Salvage value: $1,500
• Depreciation rate: 18%
• Calculate for: First period (0)
• Basis: Default (0)

Step 1: Open Google Sheets and enter the above details in a table.

Step 2: Now, type the AMORLINC formula. As seen above, the syntax of the formula is as follows.

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

So, type the following in cell B7.

=AMORLINC(

Step 3: Then, enter the six arguments one-by-one. You can either enter them directly or enter their cell references. Here, we enter the cell reference of each argument, separated by a comma. Close the parentheses.

=AMORLINC(B1, B2, B3, B4, B5, B6)

Step 4: Press Enter. The cell will show the depreciation amount for the first period.

Entering AMORLINC Through the Menu Bar.

1. Place the cursor where you want to enter the formula.
2. Go to the Insert tab in Google Sheets. Select the Function option and then click on Statistical.
3. From the list of functions, scroll down and select the AMORLINC function. Enter the arguments as we do in manual entry, close the parentheses and press Enter.

Difference Between SLN and AMORLINC

Both functions are quite similar but have some key differences. The difference between SLN and AMORLINC in Google Sheets:

Basis	SLN	AMORLINC
Depreciation Method	Straight-line which means an equal amount each year	Linear initially,  but gets accelerated after mid-life
Depreciation	It is constant over the asset’s useful life	It increases after the midpoint of the asset’s life
Mid-Year Purchase	Does not handle	Handles it
Syntax	=SLN(cost, salvage, life)	=AMORLINC(cost, purchase_date, first_period, salvage, period, rate, [basis])

Examples

The AMORLINC function in Google Sheets is used to calculate the depreciation for each accounting period. It is especially useful for mid-year asset acquisitions where precision is key as AMORLINC prorates depreciation in the first period based on the purchase date. Let us look at some interesting examples of the same.

Example #1

An asset was purchased for $50,000 on May 1, 2023. It has a depreciation rate of 10%. The asset’s value will decrease by 10% each year. The asset will be fully depreciated when its value reaches $2000 from period 0 to 4. Let us calculate the depreciation for each accounting period.

Step 1: Let us begin by entering all the details in a sheet.

Step 2: Let us calculate the depreciation for each period by entering them in Column C. Look at the image below.

Step 3: Insert the formula to calculate the depreciation of the asset in cell E2.

The complete formula is =AMORLINC($B$2,$B$3,$B$4,$B$5,C2,$B$6,$B$7) based on the syntax,

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

Step 3: The depreciation value at the end of each accounting period is attained in cells D2 to D6.

Example #2 – Calculate the depreciation for the first year

Guess you have learned how to calculate the depreciation value for a number of periods using AMORLINC in Google Sheets in the previous example. Now, let us look at the calculation for the first year. In this scenario, an office purchases a digital printer on August 1st 2024 for $25,000. It depreciates at 12% annually and is retained till it has a final salvage value of $2,000. The first accounting period is December 31, 2024.

Let us calculate first-year depreciation using AMORLINC.

Step 1: Enter all the details in a new sheet.

Step 2: This step is as straightforward as it gets! Enter the formula in a cell where you want the result as shown below.

=AMORLINC(A1, A2, A3, A4, A5, A6, A7).

Press Enter. It will return $1,750

Example #3 – Calculating depreciation of machinery purchased mid-year using the French accounting system

Now, that we have calculated the depreciation for the end of different periods, let us calculate it for mid-year. We have the below details.

• Machinery cost: $10,000
• Purchase date: July 1, 2024 (mid-year)
• First period ends: Dec 31, 2024
• Salvage value: $1,500
• Depreciation rate: 20% annually
• Basis: 0 (US 30/360)

Calculate for: the first period (0)

Step 1: Let us enter the details in a Google sheet.

Step 2: Use the following formula in an empty cell. Press Enter.

=AMORLINC(B2, B3, B4, B5, B6, B7, B8)

Press Enter.

You get the first year’s depreciation, prorated for half a year, based on the French accounting method.

(It is approximately $1,000 depreciation — 50% of full-year depreciation: 10000 * 0.20 = 2000, prorated for 6 months.)

Important Things to Note

1. The #NUM! error occurs if the date purchased is after the first period, if the salvage value is higher than the cost, or if invalid numbers are entered for the salvage, period, rate, or basis arguments.
2. It can be used for assets purchased mid-year with a specific depreciation rate, typically used in corporate financials.
3. It applies linear depreciation for the first half of the asset’s useful life and accelerated depreciation for the remaining periods.

Frequently Asked Questions (FAQs)

Download Template

This article must help understand AMORLINC Function in Google Sheets with its formulas and examples. You can download the template here to use it instantly.

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