How?Returns the depreciation of an asset for a specified period using the fixed-declining balance method.
Syntax
DB(cost,salvage,life,period,month)
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.
Month is the number of months in the first year. If month is omitted, it is assumed to be 12.
Remarks
The fixed-declining balance method computes depreciation at a fixed rate. DB uses the following formulas to calculate depreciation for a period:
(cost - total depreciation from prior periods) * rate
where:
rate = 1 - ((salvage / cost) ^ (1 / life)), rounded to three decimal places
Depreciation for the first and last periods is a special case. For the first period, DB uses this formula:
cost * rate * month / 12
For the last period, DB uses this formula:
((cost - total depreciation from prior periods) * rate * (12 - month)) / 12
Example
The example may be easier to understand if you copy it to a blank spreadsheet.
How?
- Create a blank spreadsheet.
- Select the example in the Help topic.
Selecting an example from Help
- Press CTRL+C.
- In the spreadsheet, select cell A1, and press CTRL+V.
- To switch between viewing the formula that returns the result and the result in the cell, select the cell and press F2 and then ENTER, or click Commands and Options on the spreadsheet toolbar, click the Formula tab, and look in the Formula in active cell (active cell) box.
| Data | Description |
|---|---|
| 1,000,000 | Initial cost |
| 100,000 | Salvage value |
| 6 | Lifetime in years |
| Formula | Description (Result) |
| =DB(A2,A3,A4,1,7) | Depreciation in first year, with only 7 months calculated (186,083.33) |
| =DB(A2,A3,A4,2,7) | Depreciation in second year (259,639.42) |
| =DB(A2,A3,A4,3,7) | Depreciation in third year (176,814.44) |
| =DB(A2,A3,A4,4,7) | Depreciation in fourth year (120,410.64) |
| =DB(A2,A3,A4,5,7) | Depreciation in fifth year (81,999.64) |
| =DB(A2,A3,A4,6,7) | Depreciation in sixth year (55,841.76) |
| =DB(A2,A3,A4,7,7) | Depreciation in seventh year, with only 5 months calculated (15,845.10) |