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Variable Declining Balance Depreciation Calculator

Variable Declining Balance Depreciation
Placed in Service:
 
Answer:
Cost: $575,000.00, Salvage: $5,000.00
Life: 10 years, Factor: 2
Convention: Full-Month
First Year: 8 months
Depreciation
Year
Depreciation
Expense
2010
$76,667
2011
$99,667
2012
$79,733
2013
$63,787
2014
$51,029
2015
$40,823
2016
$36,529
2017
$36,529
2018
$36,529
2019
$36,529
2020
$12,176

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Calculator Use

Use this calculator to calculate variable declining balance depreciation. This is a type of calculation allowed under MACRS.

The variable declining balance calculation is a combined method of the Declining Balance Depreciation Calculator and the Straight Line Depreciation Calculator. The depreciation calculation starts with the declining method.  At the period in the life of the asset where the depreciation calculated by the straight line method on the remaining depreciable amount will be greater than the amount calculated by the declining method, you switch to the straight line method for the remainder of the life of the asset.

Inputs

Asset Cost
the original value of your asset or the depreciable cost; the necessary amount expended to get an asset ready for its intended use
Salvage Value
the value of the asset at the end of its useful life; also known as residual value or scrap value
Useful Life
the expected time that the asset will be productive for its expected purpose
Depreciation Factor
this factor is used to calculate the depreciation rate per year. For example, 2 is 200% and commonly called double declining depreciation.
Placed in Service
select the month and enter the year the asset started being used for its intended purpose
Year
enter 1 or 4 digits; enter a four digit year to use your actual years OR enter a 1 to list years using digits 1 through the last year
Convention
choose Full-Month, Mid-Month, Mid-Year or Mid-Quarter Convention; if you don't know, keep it at the common Full-Month

Sample Full Depreciation Schedule

Cost: $575,000.00, Salvage: $5,000.00
Life: 10 years, Factor: 2
Convention: Full-Month
First Year: 8 months

Depreciation Schedule
Year
 
Book Value
Year Start
Depreciation
Percent
Depreciation
Expense
Accumulated
Depreciation
Book Value
Year End
Depreciation
Method Used
2010
$575,000
13.33%
$76,667
$76,667
$498,333
Declining-Balance
2011
$498,333
20.00%
$99,667
$176,333
$398,667
Declining-Balance
2012
$398,667
20.00%
$79,733
$256,067
$318,933
Declining-Balance
2013
$318,933
20.00%
$63,787
$319,853
$255,147
Declining-Balance
2014
$255,147
20.00%
$51,029
$370,883
$204,117
Declining-Balance
2015
$204,117
20.00%
$40,823
$411,706
$163,294
Declining-Balance
2016
$163,294
22.37%
$36,529
$448,235
$126,765
Straight-Line
2017
$126,765
22.37%
$36,529
$484,765
$90,235
Straight-Line
2018
$90,235
22.37%
$36,529
$521,294
$53,706
Straight-Line
2019
$53,706
22.37%
$36,529
$557,824
$17,176
Straight-Line
2020
$17,176
7.46%
$12,176
$570,000
$5,000
Straight-Line

Variable Declining Balance Depreciation Formulas

  • Declining Balance:
    1. Straight-Line Depreciation Percent = 100% / Useful Life
    2. Depreciation Rate = Depreciation Factor x Straight-Line Depreciation Percent
    3. Depreciation for a Period = Depreciation Rate x Book Value at Beginning of the Period
  • Switching to Straight Line Method:
    1. Depreciation in Any Remaining Period = ((Cost - Accumulated Depreciation) / Remaining Life)

Microsoft® Excel® Functions Equivalent: VDB

The Excel equivalent function for Variable Declining Balance Method is VDB(cost,salvage,life,start_period,end_period,factor,no_switch). With it you can calculate depreciation for the chosen period. "factor" defaults to 2, double declining method, and no_switch defaults to FALSE, meaning it will switch to the straight line method when it is advantageous. To fully depreciate just by the double declining method you can use our Double Declining Balance Method Depreciation Calculator.

(Microsoft® and Excel® are registered trademarks of Microsoft Corporation)



 

Cite this content, page or calculator as:

Furey, Edward "Variable Declining Balance Depreciation Calculator"; from http://www.calculatorsoup.com - Online Calculator Resource.

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