XL: VDB() Function Returns Different Values for Years and Days (819437)

SYMPTOMS

Suppose that you are using the VDB() function to return the depreciation of an asset. If you use years for the starting and ending period values, you receive a different result than you receive if you use days.

CAUSE

This behavior occurs because the VDB() function is not a linear function (although its name, Variable Declining Balance, suggests that it is). Because the amount depreciated each period is variable, the amounts in each period are different. If you change the starting and ending period values from years to days, the number of periods changes. Therefore, the depreciation amount for each period also changes.

MORE INFORMATION

You can use the VDB() function to return the depreciation of an asset for any period that you specify, including partial periods. The following is an example of a VDB function:

VDB(cost,salvage,life,start_period,end_period)

The life, start_period, and end_period values must be in the same units. The units that you use affect the value returned by the VDB() function, even if the same time period is used.

For example, the following VDB() function returns a value of $4,240.00:

=VDB(10000,0,10,0,2.5)

However, if you use the same time period, 2.5 years, with units of days instead of years, the following VDB() function returns a value of $3,935.52:

=VDB(10000,0,3650,0,912.5)

REFERENCES

For more information about the VDB function, click Microsoft Excel Help on the Help menu, type VDB function in the Office Assistant or the Answer Wizard, and then click Search to view the topic.