The VDB function is a Finance function that calculates the depreciation of an asset on the double-declining balance or another basis for a specified period. The VDB stands for variable declining balance and the function switches to straight-line depreciation when depreciation is greater than the declining balance calculation. In this guide, we’re going to show you how to use the VDB function and go over some tips and error handling methods.
Supported versions
- All versions
VDB Function Syntax
Arguments
| 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. |
| start_period | The starting period to calculation depreciation for. |
| end_period | The ending period to calculation depreciation for. |
| [factor] | Optional. The rate at which the balance declines. If omitted, defaults to 2 (the double-declining balance). |
| [no_switch] |
Optional. A logical value determining whether to switch to straight-line depreciation when depreciation is greater than the declining balance calculation.
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VDB Function Examples
By default, the VDB function will switch to straight line calculation when the depreciation value calculated with straight line method is greater than the depreciation value calculated with the double decline balance method.
- If you do not want to use the double-declining balance method, you can change the factor argument to any rate except 2.
- On the other hand, you can eliminate the switching to straight-line method behavior by making the no_switch value TRUE
For example, we want to calculate the depreciation between the 2nd and 4th years 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.
Changing factor and switching
The following formulas shows the difference between switched and not-switched methods where the factor is 1.5:
Remarks
- Use a factor other than 2 if you don't want to use the double-declining balance method.
- You can use SLN function to calculate the straight-line depreciation directly.
- If you want to use a specific period instead of a range of periods, use DDB function instead.
Excel Depreciation Functions
| Straight line | SLN |
| Sum-of-years' digits | SYD |
| Fixed-declining balance | DB |
| Double-declining balance | DDB |
| French declining balance | AMORDEGRC |
| French straight line | AMORLINC |
