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Note that the useful life is five years, but I have calculate depreciation for a full year instead
six periods listed in the schedule. This is to ac- of a half-year. The formula for period two is About the
authors
count for the half-year in the first and last peri- =VDB($C$2,0,$C$4,A9-1.5,A9-0.5). Besides the
ods. Create your first formula in cell B8, which is fact that this formula now references A9 instead Kelly L. Williams,
=VDB($C$2,0,$C$4,A8-1,A8-0.5). The first argu- of A8 because we are calculating the depreciation CPA, Ph.D., MBA,
ment is the cost, which is referenced as C2. The for the next period, now we subtract 1.5 from the is an associate
second argument is the salvage value, but instead of starting period instead of one. This is because we professor of
referencing C3, I insert a zero since that is not part actually want to start the period in the middle accounting at the
of the MACRS calculation. The third argument is of period zero instead of period one. Our ending Jones College
the useful life and is referenced as C4. The fourth period is in the middle of period one (period two of Business at
argument is the starting period. We want the depre- minus 0.5), calculating a full year of depreciation. Middle Tennessee
ciation to start in period zero, so we must include You can drag this formula down to period five State University.
minus 1 in the calculation: A8-1. The fifth and without making any changes as long as you use Wesley Hartman
final required argument is the ending period. If our absolute references. is founder at
first period had been a full year, I would have only The last period is only a half-year, so the Automata Practice
referenced cell A8 (period 0 to 1). However, this is a formula is =VDB($C$2,0,$C$4,A13-1.5,A12). The Development
half-year convention, so the first year is only a half- difference is that the ending period is defined as and director of
year. Therefore, my fifth argument will be A8-0.5, to period 5. With the starting period being 1.5 years technology at
only capture half of the period. I did use absolute prior to period six, this calculates only a half-year Kirsch Kohn &
references in my first and third arguments. Absolute of depreciation (middle of period four to period Bridge LLP.
references instruct Excel not to change the rows five).
and/or columns as a formula is being copied down See the screenshot below for the formulas used
or across a spreadsheet. in the spreadsheet and the results of the MACRS
The second formula will be slightly differ- half-year depreciation calculations.
ent since it is for the second period and will — By Kelly L. Williams, CPA, Ph.D.

journalofaccountancy.com January 2023 | 41