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Double Declining Balance Method Depreciation Calculator
Double Declining Balance Depreciation Schedule
Example - Cost: $1,750,000.00, Salvage: $10,000.00, Life: 10 years , First Year: 12 months
Year
|
Book Value
Year Start |
Depreciation
Percent |
Depreciation
Expense |
Accumulated
Depreciation |
Book Value
Year End |
| 1 |
$1,750,000 |
20.00% |
$350,000 |
$350,000 |
$1,400,000 |
| 2 |
$1,400,000 |
20.00% |
$280,000 |
$630,000 |
$1,120,000 |
| 3 |
$1,120,000 |
20.00% |
$224,000 |
$854,000 |
$896,000 |
| 4 |
$896,000 |
20.00% |
$179,200 |
$1,033,200 |
$716,800 |
| 5 |
$716,800 |
20.00% |
$143,360 |
$1,176,560 |
$573,440 |
| 6 |
$573,440 |
20.00% |
$114,688 |
$1,291,248 |
$458,752 |
| 7 |
$458,752 |
20.00% |
$91,750 |
$1,382,998 |
$367,002 |
| 8 |
$367,002 |
20.00% |
$73,400 |
$1,456,399 |
$293,601 |
| 9 |
$293,601 |
20.00% |
$58,720 |
$1,515,119 |
$234,881 |
| 10 |
$234,881 |
20.00% |
$46,976 |
$1,562,095 |
$187,905 |
Double Declining Balance Depreciation Formulas
The double declining balance method is an accelerated depreciation method. Using this method the Book Value at the beginning of each period is multiplied by a fixed Depreciation Rate which is 200% of the straight line depreciation rate, or a factor of 2. To calculate depreciation based on a different factor use our Declining Balance Calculator.
The double declining balance calculation does not consider the salvage value in the depreciation of each period however, if the book value will fall below the salvage value, the last period might be adjusted so that it ends at the salvage value. When double declining balance method does not fully depreciate an asset by the end of its life, variable declining balance method might be used instead.
- Straight-Line Depreciation Percent = 100% / Useful Life
- Depreciation Rate = 2 x Straight-Line Depreciation Percent
- Depreciation for a Period = Depreciation Rate x Book Value at Beginning of the Period
- If the first year is not a full 12 months and is a number M months, the first and last years will be calculated
- First Year Depreciation Rate = M/12 x Depreciation Rate
- Last Year Depreciation Rate = (12-M)/12 x Depreciation Rate
Double Declining Balance Depreciation Example
An asset for a business cost $1,750,000, will have a life of 10 years and the salvage value at the end of 10 years will be $10,000. You calculate 200% of the straight-line depreciation, or a factor of 2, and multiply that value by the book value at the beginning of the period to find the depreciation expense for that period.
- Straight-Line Depreciation Percent = 100% / 10 years = 10% / year
- Depreciation Rate = 2 x 10% = 20% / year
- Depreciation for a Period = 20% x Book Value at Beginning of the Period
- Depreciation for Period 1 = 20% x $1,750,000 = $350,000
- For Periods 2 and greater, depreciation is 20% x ($1,750,000 - Accumulated Depreciation )
- Depreciation for Period 2 = 20% x ($1,750,000 - $350,000 ) = $280,000
- Depreciation for Period 3 = 20% x ($1,750,000 - $630,000 ) = $224,000
- Etc ....
Microsoft® Excel® Functions Equivalent: DDB
The Excel equivalent function for Double Declining Balance Method is DDB(cost,salvage,life,period,factor) will calculate depreciation for the chosen period. "factor" defaults to 2, double declining balance method. Changing the value of "factor" can be accomplished using our Declining Balance Method Depreciation Calculator.
(Microsoft® and Excel® are registered trademarks of Microsoft Corporation)
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