How to use the AMORDEGRC() function in Excel

This function calculates the depreciation amount for an asset in a given period using the French accounting system (degressive depreciation with a switch to linear). The result is rounded to an integer.

Syntax

AMORDEGRC(Cost; Date; First_Period; Residual_Value; Period; Rate; Basis)

Arguments

• Cost (required) – Purchase cost of the asset (including incidental expenses, minus discounts).
  • Must be a positive number; otherwise, #VALUE! or #NUMBER! errors occur.
• Date (required) – The purchase date (start of depreciation).
• First_Period (required) – The end date of the first depreciation period (assigned period number 0).
• Residual_Value (required) – Expected remaining value after depreciation.
  • Must be less than Cost and non-negative; otherwise, #NUMBER! is returned.
• Period (required) – The time period for which depreciation is calculated (integer ≥ 0).
• Rate (required) – The depreciation rate (initially linear, then degressive).
• Basis (optional) – Day-count method (see Table 1 below).

Table 1: Day-Count Methods

Background

• Depreciation reflects the asset’s value loss (not physical wear).
• The Rate is first treated as linear (e.g., 10% = 10-year lifespan).
• Degressive weighting is applied based on the rate:
  • Factor 1.5 if Rate > 25% (3–4 years).
  • Factor 2 if 16.66% ≤ Rate ≤ 25% (5–6 years).
  • Factor 2.5 if Rate < 16.67% (>6 years).
• Residual value handling:
  • If residual = 0, the last two periods split the remaining value.
  • If residual > 0, depreciation stops when book value ≤ residual.

Example

An asset is purchased on June 6, 2010, for $1,000, with:

• Depreciation rate: 10%
• Residual value: $142
• First period ends: December 31, 2010

Formula

=AMORDEGRC(1000; « 6/6/2010 »; « 12/31/2010 »; 142; 0; 10%; 4)

Manual Calculation

1. Days in first period:
   =DAYS360(« 6/6/2010 »; « 12/31/2010 »; TRUE) → 204 days

1. Depreciation:
   =ROUND(1000 × 10% × 2.5 × (204/360); 0) → $142 (matches AMORDEGRC).

Subsequent Periods

• Multiply the previous book value by 10% × 2.5.