Depreciation Sum of the year's digits method

If an asset has a useful life of n years, then the depreciation rate r represents the fractional number from year to year decreases with the denominator fraction represents the sum of n natural numbers.

he number of year numbers of n years is: SDY = 1 + 2 + 3 + ... + n, so the final depreciation expense formula for each year is:

Formula of Depreciation Sum of the year's digits method

Information :
A = Cost of assets is the amount of costs incurred by the company to acquire an activation until the asset is ready to be operated.
S = Estimated residual value of the asset is the value of the appraisal that may be obtained through the assets that have passed its life.
n = Age of benefit / Age of economic assets in the year.
D = Depreciation expense for each period
k = kth year number

Example Question of Depreciation Sum of the year's digits method

An asset at a cost of $ 5,000,000 is estimated to have a useful life of 6 years with a residual value of $ 800,000 using the number of numbers method. Please determine the annual depreciation expense.

Answer :
A = $5,000,000
A = $800,000
n = 6 Year
SYD = 6 + 5 + 4 + 3 + 2 + 1 = 21