SLN Function

Summary

The Excel SLN function returns straight-line depreciation for one period. Microsoft defines it as a method that spreads the depreciable amount evenly across the asset life, so the periodic expense remains constant from one period to the next.

That makes SLN the standard choice when the workbook needs a stable depreciation schedule rather than an accelerated one. If the asset cost is $10,000, salvage is $1,000, and life is 5 years, SLN allocates the same portion of the $9,000 depreciable base to each year.

SLN is therefore less about timing acceleration and more about consistency. It is well suited to schedules, planning models, and accounting examples where a flat depreciation charge is easier to interpret and compare.

Syntax

=SLN(cost, salvage, life)

cost is the asset's original cost, salvage is the value expected at the end of its useful life, and life is the number of periods across which the asset will be depreciated. The core idea is simple: subtract salvage from cost, then spread the remaining depreciable amount evenly over the life.

Because SLN does not ask for a period argument, it does not produce a different result from one year to the next. The function assumes each period should carry the same expense.

Arguments

• cost - The asset's acquisition cost.
• salvage - The expected residual value at the end of the asset life.
• life - The number of periods over which the asset is depreciated.

The result depends on the period unit used for life. If life is expressed in years, the result is annual depreciation. If life is expressed in months, the result is monthly depreciation. That unit choice should stay consistent throughout the model.

SLN vs Other Functions

SLN belongs to the depreciation family, but it differs from accelerated methods because the periodic charge does not decline over time.

Choose SLN when the model needs simplicity and a uniform expense path. Choose the other methods when the accounting policy or analysis requires more depreciation in earlier periods.

Using the SLN Function

SLN is commonly used in fixed-asset schedules because it is easy to audit. Once the depreciable base and life are established, the periodic expense remains unchanged, which makes book value rollforwards straightforward.

It is also useful as a benchmark even in models that eventually use accelerated depreciation. Comparing SLN to DB, DDB, or SYD helps show how much timing difference the chosen method creates.

• Use SLN when a constant periodic charge is required.
• Keep the life unit aligned with the reporting period used in the schedule.
• Check that salvage is not greater than cost, or the result will not make economic sense.

Example 1 - Standard Depreciation

This formula returns the annual straight-line depreciation for a $10,000 asset with a $1,000 salvage value and a 5-year life. The depreciable base is $9,000, so the annual charge is that amount divided evenly across five years.

This is a strong starting example because it shows the simplest depreciation idea: the same expense every year. That makes SLN easier to understand than the accelerated methods at first.

=SLN(10000,1000,5)

Example 2 - Long-Term Asset Audit

Extending the useful life to 10 years lowers the periodic expense because the same depreciable base is spread over more periods. This is a good reminder that life assumptions directly control the pace of expense recognition under straight-line depreciation.

So the example teaches more than one answer. It shows that changing only the useful life can significantly change the yearly expense, even when cost and salvage stay the same.

=SLN(10000,1000,10)

Example 3 - High-Value Asset Check

This comparison turns the depreciation result into a policy test. Instead of just returning the annual charge, the formula asks whether the charge is above a specific review threshold.

This makes the example useful for review sheets and controls. The workbook can flag high yearly expense automatically instead of leaving the user to compare numbers by eye.

=SLN(10000,1000,5)>1500

Example 4 - Remaining Book Value

Subtracting one period of straight-line depreciation from cost gives the carrying value after the first year. In a full fixed-asset schedule, the same logic is repeated across later periods to track the book value path over time.

This helps connect the depreciation expense to the remaining asset value. It shows how one year's charge changes the balance sheet number that will be carried forward.

=10000-SLN(10000,1000,5)

Conclusion Recap

SLN is useful when the goal is a simple, even depreciation pattern from start to finish. In this lesson, that meant calculating one steady depreciation charge, seeing how useful life changes the amount, testing the charge against a limit, and using it to estimate book value after the first period.

The key idea is consistency. SLN does not try to front-load or delay expense. It spreads the depreciable amount evenly, which makes it one of the easiest methods to read, explain, and compare in a basic asset schedule.

• Summary: SLN returns straight-line depreciation for one period.
• Syntax: =SLN(cost,salvage,life).
• Core setup: Use consistent period units and a realistic salvage assumption.
• Best use: Fixed-asset schedules, book value rollforwards, and constant-expense depreciation models.