Complete Guide to AMORLINC: Calculate Linear Depreciation Like a Pro
=AMORLINC(cost, date_purchased, first_period, salvage, period, rate, [basis])The AMORLINC formula is a specialized financial function in Excel designed to calculate linear depreciation for assets acquired during an accounting period. This function is particularly valuable for accountants, financial analysts, and business managers who need to track asset depreciation according to French accounting standards or similar linear depreciation methods. Unlike simpler depreciation functions, AMORLINC accounts for the exact purchase date and the timing of the first accounting period, making it ideal for assets purchased mid-year or during irregular fiscal periods. Understanding AMORLINC is essential for accurate financial reporting, particularly in international business environments where specific depreciation methodologies are mandated by accounting regulations. The formula combines acquisition cost, salvage value, depreciation rate, and precise date calculations to deliver accurate period-specific depreciation amounts. This advanced function requires careful parameter setup but provides unparalleled accuracy for complex depreciation scenarios involving partial-year acquisitions and variable accounting periods.
Syntax & Parameters
The AMORLINC formula follows this structure: =AMORLINC(cost, date_purchased, first_period, salvage, period, rate, [basis]). Each parameter plays a critical role in calculating accurate depreciation amounts. The 'cost' parameter represents the initial acquisition cost of the asset in currency units. 'date_purchased' is the exact date the asset was acquired, formatted as a valid Excel date. 'first_period' specifies the end date of the first accounting period, which may differ from the purchase date if the asset was acquired mid-period. The 'salvage' parameter indicates the asset's residual value at the end of its useful life. 'period' identifies which depreciation period you're calculating for, using sequential numbering (1, 2, 3, etc.). 'rate' represents the annual depreciation rate as a decimal (0.2 for 20% annual depreciation). The optional 'basis' parameter determines the day-counting method: 0 for 360-day year (NASD), 1 for actual days, 2 for actual/360, 3 for actual/365, or 4 for 30/360 (European). Always ensure date formats are consistent and the rate parameter reflects your intended annual depreciation percentage. The formula automatically adjusts depreciation for partial periods, making it superior to manual calculations.
costdate_purchasedfirst_periodsalvageperiodratebasisPractical Examples
Manufacturing Equipment Purchased Mid-Year
=AMORLINC(50000, DATE(2024,3,15), DATE(2024,12,31), 5000, 1, 0.2, 1)This formula calculates the depreciation for the first period (partial year from March 15 to December 31, 2024). The function automatically adjusts the depreciation amount based on the 291 days the asset was in service during the first period, rather than calculating full-year depreciation.
Office Furniture with Multiple Period Tracking
=AMORLINC(12000, DATE(2023,6,1), DATE(2023,12,31), 2000, 2, 0.15, 1)Period 2 represents the second accounting period (full year 2024). Since the asset was acquired mid-year in 2023, period 2 captures a complete 365-day depreciation cycle after the initial partial period.
Vehicle Fleet with European Accounting Standards
=AMORLINC(35000, DATE(2024,9,10), DATE(2024,12,31), 8000, 1, 0.25, 4)The basis parameter set to 4 applies the 30/360 European day-counting method, which standardizes months to 30 days. This is common in European accounting practices and provides consistent period calculations regardless of actual calendar days.
Key Takeaways
- AMORLINC calculates linear depreciation with precise date handling, automatically adjusting for partial periods when assets are purchased mid-year
- The formula requires seven parameters (one optional) including dates, cost, salvage value, depreciation rate, and day-counting basis for flexible accounting compliance
- Always express the rate parameter as a decimal (0.25 for 25%) and use the DATE() function for date parameters to avoid #VALUE! errors
- AMORLINC is superior to SLN for complex scenarios involving mid-period acquisitions, multiple fiscal calendars, and international accounting standards
- Combine AMORLINC with SUM, SUMPRODUCT, and array formulas to create comprehensive depreciation schedules and book value tracking systems
Pro Tips
Use named ranges for AMORLINC parameters (e.g., 'AssetCost', 'PurchaseDate') to create self-documenting formulas that are easier to audit and maintain.
Impact : Reduces formula errors by 40%, improves team collaboration, and makes depreciation schedules easier to review during audits.
Create a lookup table mapping period numbers to fiscal year dates, then reference this table in your AMORLINC formulas for consistency across multiple assets.
Impact : Ensures all assets use identical period definitions, prevents date mismatches, and simplifies consolidation of depreciation across asset classes.
Build a sensitivity analysis table showing how different depreciation rates affect total depreciation, allowing stakeholders to understand tax implications before finalizing rates.
Impact : Facilitates better decision-making on asset depreciation policies and helps optimize tax strategies by visualizing rate impacts.
Validate AMORLINC results by comparing period depreciation amounts to manual calculations using the formula: (Cost - Salvage) × Rate × (Days in Period / 365).
Impact : Catches formula errors early, provides audit trail documentation, and builds confidence in automated depreciation calculations.
Useful Combinations
Total Depreciation to Date with SUM and AMORLINC
=SUM(AMORLINC($A$2, $B$2, $C$2, $D$2, ROW(INDIRECT("1:"&E2)), $F$2, 1))Combines AMORLINC with SUM and INDIRECT to calculate cumulative depreciation through a specified period. This array formula eliminates the need for helper columns and provides running totals automatically.
Book Value Tracking with AMORLINC and Subtraction
=A2-SUMPRODUCT(AMORLINC($A$2,$B$2,$C$2,$D$2,ROW(INDIRECT("1:"&E2)),$F$2,1))Calculates remaining book value by subtracting cumulative depreciation from original cost. Useful for balance sheet reporting and asset valuation tracking across multiple periods.
Period-over-Period Comparison with AMORLINC and IF
=IF(AMORLINC($A$2,$B$2,$C$2,$D$2,E2,$F$2,1)>AMORLINC($A$2,$B$2,$C$2,$D$2,E2-1,$F$2,1),"Increasing","Stable")Compares depreciation amounts between consecutive periods to identify patterns or anomalies. Useful for variance analysis and depreciation schedule validation.
Common Errors
Cause: The rate parameter is entered as a percentage (25) instead of a decimal (0.25), or date parameters are formatted as text instead of proper Excel dates.
Solution: Convert percentages to decimals by dividing by 100. Ensure all date parameters use DATE() function or are recognized as date values. Verify with =ISNUMBER() and =ISDATE() functions if available in your version.
Cause: The period parameter exceeds the asset's useful life, negative values are used for cost or salvage, or the depreciation rate is unrealistic (greater than 1 or negative).
Solution: Calculate the maximum periods using (cost - salvage) / (cost * rate). Ensure all financial parameters are positive values. Verify rate is between 0 and 1 (representing 0-100% annual depreciation).
Cause: Referenced cells containing date_purchased, first_period, or other parameters have been deleted or moved to a different location, breaking the formula reference.
Solution: Use absolute references ($A$1) instead of relative references for parameter cells. Rebuild the formula using the correct cell references. Consider using named ranges for better formula maintainability and error prevention.
Troubleshooting Checklist
- 1.Verify date parameters are formatted as Excel dates (use ISNUMBER() to confirm), not text strings that appear as dates
- 2.Confirm the rate parameter is expressed as a decimal (0.20 for 20%) not a percentage value (20)
- 3.Check that period numbers are sequential integers starting from 1, with no gaps or non-numeric values
- 4.Validate that salvage value is less than acquisition cost and both are positive numbers
- 5.Ensure first_period end date is after date_purchased, typically matching your fiscal period end date
- 6.Test the basis parameter matches your accounting standards (0 for NASD/360, 1 for actual, 4 for European 30/360)
Edge Cases
Asset purchased on the last day of the first period
Behavior: AMORLINC calculates depreciation for one day only in period 1, with full periods beginning in period 2
Solution: This is correct behavior. The formula accurately reflects the single day of asset ownership in the first period
Verify with your accounting department that this matches your company's depreciation policy for year-end acquisitions
Salvage value equals or exceeds acquisition cost
Behavior: AMORLINC returns 0 or negative depreciation, which is mathematically incorrect for accounting purposes
Solution: Implement validation: IF(salvage >= cost, "Error: Check salvage value", AMORLINC(...)) to prevent invalid calculations
This edge case indicates a data entry error; salvage should never exceed acquisition cost
Period parameter exceeds useful life of asset
Behavior: AMORLINC may return 0 or unexpected values once the asset is fully depreciated
Solution: Calculate maximum periods as (Cost - Salvage) / Annual Depreciation, then use IF to limit period calculations
Implement a check to prevent calculations beyond the asset's useful life to maintain depreciation schedule accuracy
Limitations
- •AMORLINC is not available in Google Sheets, limiting its use for cloud-based collaborative accounting work; alternative depreciation functions must be used or custom formulas developed
- •The formula assumes consistent depreciation rates throughout the asset's life and cannot accommodate mid-life rate changes or asset revaluations common in some accounting standards
- •AMORLINC requires precise date inputs and careful parameter setup; small errors in date formatting or rate expression cause #VALUE! or #NUM! errors without clear diagnostic messages
- •The function is designed for French accounting standards and may not align with IFRS, GAAP, or other international standards that require different depreciation methodologies or salvage value treatments
Alternatives
Compatibility
✓ Excel
Since 2007
=AMORLINC(cost, date_purchased, first_period, salvage, period, rate, [basis])✗Google Sheets
Not available
✓LibreOffice
=AMORLINC(cost, date_purchased, first_period, salvage, period, rate, [basis])