Declining-balance depreciation for one year (DB)
The problem
Problem statement
The asset's cost, salvage, life and the year to report are in B1:B4. Put that year's declining-balance charge in the Charge cell D2, rounded to a whole unit.
Declining balance charges more in early years and is based on the opening book value, not on cost every time.
Problem data
Show the sheet as a table (selectable, copyable)
| A | B | D | |
|---|---|---|---|
| 1 | Cost | 12000 | Charge for that year |
| 2 | Salvage | 2000 | |
| 3 | Life (years) | 4 | |
| 4 | Year | 1 |
Notes
DB(cost, salvage, life, period) derives a rate from cost and salvage and applies it to the opening book value. This is why year one and year two differ while straight-line does not, and why the salvage value still matters even though it is never subtracted directly.
How to approach
Your answer goes in D2.
- Target cell is D2
- DB takes four arguments: cost, salvage, life, period
- The period comes from B4
- Shape: =ROUND(DB(?, ?, ?, ?), ?)
Function guide
FAQ
How does declining-balance depreciation work?
A rate is derived from cost, salvage and life, then applied to the opening book value each year, so the charge falls over time.
Why is my DB charge not equal to cost × rate?
The rate applies to the book value at the start of the year, not to the original cost. Year two is smaller than year one.