The VDB function in Google Sheets is an essential tool for financial analysts and accountants, as it computes the depreciation of an asset over a designated period. This flexible function is particularly useful for businesses that need to allocate the cost of an asset over time, considering various depreciation methods.

Syntax

VDB(cost, salvage, life, start_period, end_period, [factor], [no_switch])

• cost: The initial cost of the asset.
• salvage: The value at the end of the asset’s useful life.
• life: The total number of periods (years or months) the asset will be depreciated.
• start_period: The period at which you want to start calculating depreciation.
• end_period: The period at which to end the depreciation calculation.
• factor: (Optional) The rate at which the asset is being depreciated; default is 2 (double-declining balance).
• no_switch: (Optional) If TRUE, the function will not switch to straight-line depreciation when it yields a higher amount.

Example #1

=VDB(10000, 2000, 5, 1, 3)

In this example, a $10,000 asset with a $2,000 salvage value will be depreciated over 5 years. The calculation period is set from year 1 to year 3, yielding a depreciation result of $4,800.

Example #2

=VDB(15000, 3000, 10, 2, 5)

This formula computes the depreciation for a $15,000 asset, salvage value of $3,000, over 10 years, from year 2 to year 5. The result shows a depreciation of $4,560.

Example #3

=VDB(25000, 5000, 8, 1, 6, 1)

Here, the depreciation of a $25,000 asset with a $5,000 salvage value across 8 years is calculated, using a depreciation factor of 1, across years 1 to 6. The output would be $10,497.69.

Error handling

• VALUE!: This error occurs when non-numeric values are provided for the cost, salvage, or life parameters.
• NUM!: This indicates that one of the numeric values is invalid, such as negative values for cost or life.
• REF!: This happens if the referenced cell(s) for the parameters cannot be found or do not point to valid cells.

Conclusion

The VDB function is a powerful asset depreciation calculator within Google Sheets, facilitating the financial management of assets over their useful life. By understanding its parameters and potential errors, users can effectively implement this function to ensure accurate financial reporting and analysis.