The DDB function is a Finance function that calculates the depreciation of an asset on the double-declining balance or another basis for a specified period. In this guide, we’re going to show you how to use the DDB function and go over some tips and error handling methods.
- All versions
DDB Function Syntax
|cost||The initial cost of the asset.|
|salvage||The value after the asset has been fully depreciated, salvage value.|
|life||The number of periods over which asset is depreciated, useful life of the asset.|
|period||Specific period to calculation depreciation for.|
|[factor]||Optional. The rate at which the balance declines. If omitted, defaults to 2 (the double-declining balance).|
DDB Function Examples
You can specify the value which the DDB function returns by the factor argument. If the factor is omitted or entered as 2, the function calculates the double-declining balance depreciation in a specified period based on the initial cost, salvage value and the useful life. You can change this factor if you do not want to use the double-declining balance method.
For example, we want to calculate the depreciation for the 2nd year of an asset with an initial cost of $20,000, a useful life of 5 years, and a salvage value of $4,000.
Double-declining balance (w/o factor)
The following formula calculates the double-declining depreciation for our sample.
You can customize the function by including a factor value other than 2, denoting the double declining depreciation method.
There are two samples below for factor rates 1 and 1.75. See how depreciation values and periods varies.
- Use a factor other than 2 to use a different method than the double-declining balance method.
- The DDB function uses the following formula:
- You can use VDB function if the depreciation is greater than the declining balance calculation.
Excel Depreciation Functions
|French declining balance||AMORDEGRC|
|French straight line||AMORLINC|