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sum-of-the-yearsÂ’ digits depreciation method

sum-of-the-yearsÂ’ digits depreciation method definition - finance

An accelerated depreciation schedule that totals up the digits for the years of the useful life. An asset with four years of life would be added up to produce 10 (4 + 3 + 2 + 1 = 10). A depreciation schedule follows for a $10,000 asset, assuming no resale value.

Per year Cumulative

Year 1 $ 4,000 $ 4,000

Year 2 $ 3,000 $ 7,000

Year 3 $ 2,000 $ 9,000

Year 4 $ 1,000 $10,000

$10,000

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.