Sunday, April 23, 2017

DDB function

DDB function

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.

Examples

In the following examples, the results are rounded to two decimal places.

Cost

Salvage

Life

Formula

Description (Result)

2400

300

10

=DDB([Cost],[Salvage],[Life]*365,1)

First day's depreciation. Factor is automatically assumed to be 2. (1.32)

2400

300

10

=DDB([Cost],[Salvage],[Life]*12,1,2)

First month's depreciation (40.00)

2400

300

10

=DDB([Cost],[Salvage],[Life],1,2)

First year's depreciation (480.00)

2400

300

10

=DDB([Cost],[Salvage],[Life],2,1.5)

Second year's depreciation using a factor of 1.5 instead of the double-declining balance method (306.00)

2400

300

10

=DDB([Cost],[Salvage],[Life],10)

Tenth year's depreciation. Factor is automatically assumed to be 2 (22.12)

No comments:

Post a Comment