Using Microsoft Excel's Double Declining Balance Depreciation Function

Making fiscal prognoses or performing investing analyses that demands to include dual declining balance depreciation? Microsoft Excel can help. Excel's DDB, or dual declining balance, depreciation mathematical mathematical function allows you cipher 200% declining balance depreciation.

The DDB function ciphers double-declining balance depreciation for an plus given the
cost, its salvage value, estimated economical life, the accounting time period for which depreciation
is being calculated, and, optionally, the factor at which the balance declines. (If you don't
include the optional factor argument, Excel put this value to 2 indicating "double" declining
balance.) The DDB mathematical function utilizes the followers syntax:

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

Suppose, for example, that you must cipher the double-declining balance depreciation for
equipment that costs $50,000, endures five years, and will have got a salvage value of $10,000 at
the end of the 5th year. To cipher the depreciation for the first year, you utilize the followers formula:

=DDB (50000,10000,5,1)

The mathematical function tax returns the value 20000.00. To cipher the depreciation for the 2nd year,
you utilize the formula

=DDB (50000,10000,5,2)

The mathematical function tax returns the value 12000.00.

NOTE: A common convention when using double-declining balance depreciation is to switch
to straight-line depreciation at the point in clip when consecutive depreciation exceeds
declining balance depreciation. The DDB mathematical mathematical function doesn't do this switch, but the
VDB function does. Use it, therefore, if you desire to utilize this convention.

CPA Sir Leslie Stephen L. Horatio Nelson wrote the bestsellers Accelerate and QuickBooks , and books about little concern accounting and the popular downloadable do-it-yourself guides which have got together sold more than than one million copies.