DDB

MS Excel Spreadsheet

See Also

Returns the depreciation of an asset for a specified period using the double-declining balance method or some other method you specify.

Syntax

DDB(cost,salvage,life,period,factor)

Cost    is the initial cost of the asset.

Salvage    is the value at the end of the depreciation (sometimes called the salvage value of the asset).

Life    is the number of periods over which the asset is being depreciated (sometimes called the useful life of the asset).

Period    is the period for which you want to calculate the depreciation. Period must use the same units as life.

Factor    is the rate at which the balance declines. If factor is omitted, it is assumed to be 2 (the double-declining balance method).

All five arguments must be positive numbers.

Remarks

  • The double-declining balance method computes depreciation at an accelerated rate. Depreciation is highest in the first period and decreases in successive periods. DDB uses the following formula to calculate depreciation for a period:

    ((cost-salvage) - total depreciation from prior periods) * (factor/life)

  • Change factor if you do not want to use the double-declining balance method.
  • Use the VDB function if you want to switch to the straight-line depreciation method when depreciation is greater than the declining balance calculation.

Example

The example may be easier to understand if you copy it to a blank spreadsheet.

ShowHow?

Data Description
2400 Initial cost
300 Salvage value
10 Lifetime in years
Formula Description (Result)
=DDB(A2,A3,A4*365,1) First day's depreciation. Factor is automatically assumed to be 2. (1.32)
=DDB(A2,A3,A4*12,1,2) First month's depreciation (40.00)
=DDB(A2,A3,A4,1,2) First year's depreciation (480.00)
=DDB(A2,A3,A4,2,1.5) Second year's depreciation using a factor of 1.5 instead of the double-declining balance method (306.00)
=DDB(A2,A3,A4,10) Tenth year's depreciation. Factor is automatically assumed to be 2 (22.12)

Note  The results are rounded to two decimal places.