accelerated depreciation method in which the amounts recognized in the early periods of an asset's useful life are greater than those recognized in the later periods. The SYD is found by estimating an asset's useful life in years, assigning consecutive numbers to each year, and totaling these numbers. For n years, the short-cut formula for summing these numbers is SYD = n(n + 1)/2. The yearly depreciation is then calculated by multiplying the total depreciable amount for the asset's useful life by a fraction whose numerator is the remaining useful life and whose denominator is the SYD. Thus annual depreciation equals
For example, assume that an asset costs $1000 and has an estimated useful life of five years. The estimated salvage value at the end of the five-year period is $100. The SYD is 5(5 + 1)/2 = 15. The calculations for this example are shown below:
| Year | Fraction | Depreciation | |||
| 1 | 5/15 | × | $900 | = | $300 |
| 2 | 4⁄15 | × | 900 | = | 240 |
| 3 | 3⁄15 | × | 900 | = | 180 |
| 4 | 2⁄15 | × | 900 | = | 120 |
| 5 | 1⁄15 | × | 900 | = | 60 |
| Total | $900 |
