Description of the DDB function for Excel

The DDB function of Excel calculates the depreciation of an asset for a given period, using the double declining balance method or other specified method.

Grammar

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

The cost is the original value of the asset.

Salvage is the value of the asset at the end of the depreciation (also known as the asset Salvage value).

Life is a depreciation term (sometimes called an asset's lifespan).

Period is the period for which the depreciation value needs to be calculated. Period must use the same unit as life.

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

Note that all five parameters must be positive numbers.

Description

• Double Declining Balance method calculates depreciation at an accelerated rate. Depreciation is the highest in the first stage and will be reduced in the subsequent phase. DDB uses the following formula to calculate the depreciation for one phase:

((asset original value-asset salvage Value)-Previous period depreciation value) * (Declining balance rate/lifecycle)

• Change the declining balance rate if you do not want to use the double declining balance method.

• Use the VDB function if you want to convert to straight line balance decrement when the depreciation is greater than the balance descending calculation value.

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Classification:

• Excel Tutorials