What is Double Declining Balance Method?
The Double Declining Balance (DDB) method is a form of accelerated depreciation used in accounting to allocate the cost of a tangible asset more heavily in the earlier years of its useful life. This method assumes that an asset's utility or productivity declines more rapidly in its earlier years, making it appropriate to recognize higher depreciation expenses during those periods.
In the Double Declining Balance method, the depreciation expense for each period is calculated by applying a fixed percentage rate, which is double the straight-line depreciation rate, to the remaining book value of the asset. The remaining book value is the original cost of the asset minus the accumulated depreciation up to that point.
This method results in a higher depreciation expense in the early years of the asset's life, gradually decreasing over time until it reaches the asset's salvage value or its estimated residual value at the end of its useful life.
How to Calculate Double Declining Balance Method?
Double Declining Balance Method calculator uses Depreciation Expense = (((Purchase Cost-Salvage Value)/Useful Life Assumption)*2)*Beginning PP&E Book Value to calculate the Depreciation Expense, The Double Declining Balance Method is an accelerated depreciation technique commonly used in accounting to allocate the cost of an asset more heavily in the earlier years of its useful life. Depreciation Expense is denoted by DE symbol.
How to calculate Double Declining Balance Method using this online calculator? To use this online calculator for Double Declining Balance Method, enter Purchase Cost (PC), Salvage Value (SV), Useful Life Assumption (ULA) & Beginning PP&E Book Value (BBV) and hit the calculate button. Here is how the Double Declining Balance Method calculation can be explained with given input values -> 462222.2 = (((340000-180000)/9)*2)*13.