sum-of-the-years’ digits depreciation method investment & finance definition

An accelerated depreciation schedule that totals up the digits for the years of the useful life. An asset with four years of life would be added up to produce 10 (4 + 3 + 2 + 1 = 10). A depreciation schedule follows for a $10,000 asset, assuming no resale value.

                          Per year      Cumulative

Year 1               $ 4,000        $ 4,000   

Year 2               $ 3,000        $ 7,000

Year 3               $ 2,000        $ 9,000

Year 4               $ 1,000        $10,000

                       $10,000