Standard fixed-asset depreciation functions such as SLN (Straight-Line) or DB (Declining Balance) assume that assets are acquired on the first day of an accounting fiscal year. In practical commercial operations, capital assets—such as industrial machinery, server hardware, and corporate vehicles—are purchased mid-year. Under European and French accounting frameworks, the initial accounting period requires exact prorated depreciation based on the precise calendar day the asset was placed into service.
To automate this statutory calculation without manual day-counting formulas, Microsoft Excel provides the AMORLINC function. It evaluates the exact purchase date, fiscal year-end boundaries, salvage salvage value, and annual depreciation rates to output prorated linear depreciation across the asset lifecycle.
Syntax and Parameters of AMORLINC
The AMORLINC function uses the following formula structure:
=AMORLINC(cost, date_purchased, first_period, salvage, period, rate, [basis])| Argument | Data Type | Definition and Technical Constraints |
|---|---|---|
| cost | Currency / Numeric | The initial purchase cost or acquisition basis of the asset. |
| date_purchased | Date | The exact date when the asset was purchased or placed in service. |
| first_period | Date | The ending calendar date of the first fiscal accounting period. |
| salvage | Currency / Numeric | The residual or scrap value of the asset at the conclusion of its useful life. |
| period | Integer (0, 1, 2…) | The specific period for which you want to calculate depreciation (Period 0 = initial prorated period). |
| rate | Decimal / Percentage | The annual straight-line depreciation rate (e.g. 20% or 0.20 for a 5-year asset). |
| basis (optional) | Integer (0 to 4) | Year basis convention: 0 (US 30/360), 1 (Actual/Actual), 3 (Actual/365), 4 (European 30/360). |
Step-by-Step Practical Example: Building an Asset Depreciation Schedule
Consider an enterprise server cluster purchased on 15 August 2026 for £120,000. The company’s fiscal year ends on 31 December each calendar year. The server has an estimated useful life of 5 years (annual depreciation rate of 20% or 1/5), a salvage value of £10,000, and uses the Actual/Actual day-count basis (1).
Set up the initial parameters in Excel:
B1(Asset Cost):120000B2(Date Purchased):=DATE(2026, 8, 15)B3(First Period End):=DATE(2026, 12, 31)B4(Salvage Value):10000B5(Depreciation Rate):0.20B6(Day-Count Basis):1
Calculating Initial Prorated Depreciation (Period 0)
To determine the partial depreciation for the months remaining in 2026 (15 August to 31 December), enter this formula:
=AMORLINC($B$1, $B$2, $B$3, $B$4, 0, $B$5, $B$6)Excel calculates the exact fraction of the year elapsed (138 days out of 365) multiplied by the full annual depreciation allowance (£24,000), outputting exactly £9,073.97.
Generating Subsequent Full Accounting Periods
Create a schedule table from Period 0 through Period 5:
| Accounting Period | Fiscal Year | Formula Entered | Computed Depreciation |
|---|---|---|---|
| Period 0 | FY 2026 (Prorated) | =AMORLINC($B$1, $B$2, $B$3, $B$4, 0, $B$5, $B$6) |
£9,073.97 |
| Period 1 | FY 2027 (Full Year) | =AMORLINC($B$1, $B$2, $B$3, $B$4, 1, $B$5, $B$6) |
£24,000.00 |
| Period 2 | FY 2028 (Full Year) | =AMORLINC($B$1, $B$2, $B$3, $B$4, 2, $B$5, $B$6) |
£24,000.00 |
| Period 3 | FY 2029 (Full Year) | =AMORLINC($B$1, $B$2, $B$3, $B$4, 3, $B$5, $B$6) |
£24,000.00 |
| Period 4 | FY 2030 (Full Year) | =AMORLINC($B$1, $B$2, $B$3, $B$4, 4, $B$5, $B$6) |
£24,000.00 |
| Period 5 | FY 2031 (Terminal Remainder) | =AMORLINC($B$1, $B$2, $B$3, $B$4, 5, $B$5, $B$6) |
£4,926.03 |
Notice that in Period 5, AMORLINC automatically caps depreciation so the total cumulative deductions (£110,000) exactly equal the cost (£120,000) minus salvage value (£10,000). Entering Period 6 returns 0.
AMORLINC vs AMORDEGRC
Both functions are French accounting tools. Use AMORLINC when straight-line linear depreciation is required. If your tax jurisdiction mandates accelerated degressive depreciation with statutory multiplier coefficients based on asset lifespan, implement AMORDEGRC instead.
Troubleshooting AMORLINC Formula Errors
When working with fiscal calendars, Excel returns specific errors if parameter bounds are violated:
- #NUM! Error: Occurs when
date_purchased > first_period(the purchase date cannot fall after the end of the first fiscal period). It also triggers ifsalvage >= cost,rate <= 0, or invalid numbers are passed forbasis. - #VALUE! Error: Occurs when dates are supplied as raw unparsed text strings rather than numeric serial dates. Always wrap literal calendar values in
DATE(YYYY, MM, DD). - Negative Period Numbers: The
periodargument must be an integer greater than or equal to0. Passing negative values throws a formula fault.