Double Declining Balance Calculator to Calculate Depreciation

Double Declining Balance Calculator Sign

This calculator will calculate the rate and expense amount for an asset for a given year based on its acquisition cost, salvage value, and expected useful life -- using the double declining balance method.

Plus, the calculator also gives you the option to include a year-by-year depreciation schedule in the results -- along with a button to open the schedule in a printer friendly window.

Note that if you would like an answer to "What is Depreciation?", or you would like to calculate straight line depreciation, please visit the SLD Calculator.

Or, if you would like calculate or learn about the Modified Accelerated Cost Recovery System (MACRS) method, please visit the MACRS Calculator.

Read more ...

Also on this page:

Double Declining Balance Calculator

Calculate double declining balance depreciation rate and expense amount for an asset for a given year based on its acquisition cost, salvage value, and expected useful life.

Learn More

Selected Data Record:

A Data Record is a set of calculator entries that are stored in your web browser's Local Storage. If a Data Record is currently selected in the "Data" tab, this line will list the name you gave to that data record. If no data record is selected, or you have no entries stored for this calculator, the line will display "None".

DataData recordData recordSelected data record: None
Asset name:Asset name:Asset name (optional):Asset name (optional):

Asset name (optional text):

If you would like the name of the asset, or General Asset Account (GAA), included in the title of the depreciation schedule, enter the name in this field.

Purch cost:Purchase cost:Purchase or acquisition cost:Purchase or acquisition cost:

Purchase or acquisition cost:

Enter the total cost to acquire the asset, or the adjusted basis. Enter the amount without dollar sign or any commas.

$
Salvage val:Salvage value:Salvage value at end recovery period:Salvage value at end recovery period:

Salvage value at end of recovery period:

Enter the expected salvage value (also known as residual value) of the asset at the end of its recovery period (without dollar sign or commas). If you expect the asset to be worthless at the end of its recovery period, enter a zero. Note that the double declining balance method ignores the salvage value for as long the book value remains higher than the salvage value.

$
Recover yrs:# recover years:Number of recovery years:Number of years to recover cost:

Number of years to recover cost:

Enter the number of years you expect this asset to be in service for. Note that in order to depreciate the asset it will need to be in service for more than 1 year.

#
Month and year in service:Month and year placed in service:Month and year placed in service:Month and year placed in service:

Month and year asset placed in service:

Select the month and enter the 4-digit year indicating when the property was first placed in service.

#
Deprec year:Depreciation year:Year to calculate depreciation for:Year to calculate depreciation expense for:

Year to calculate depreciation expense for:

Enter the 4-digit year you would like the calculator to calculate the depreciation expense for.

#
Round:Round results:Round results to nearest dollar:Round results to nearest dollar:

Round results:

If you will be printing out the depreciation schedule, indicate whether or not you want to round the currency amounts in the report to the nearest dollar.

Schedule:Include schedule:Include depreciation schedule:Include depreciation schedule:

Include depreciation schedule:

If you would like a depreciation schedule included in the results so you can print it out, move the slider to the "Yes" position.

Base:Depreciable base:Depreciable base:Depreciable base:

Depreciable base:

This is the difference between the acquisition cost (adjusted basis) and the salvage value.

Deprec %:Depreciation %:Depreciation percentage for entered year:Depreciation percentage for entered year:

Depreciation percentage for entered year:

This is the double declining rate used by the calculator for the selected year. If the selected year is either the first or final year, the percentage will be prorated based on what month of the year the asset was placed in service.

Deprec exp:Depreciation exp:Depreciation expense for entered year:Depreciation expense for entered year:

Depreciation expense for entered year:

This is the calculated depreciation expense for the selected year. If the selected year is either the first or final year, the depreciation expense will be prorated based on what month of the year the asset was placed in service.

If you would like to save the current entries to the secure online database, tap or click on the Data tab, select "New Data Record", give the data record a name, then tap or click the Save button. To save changes to previously saved entries, simply tap the Save button. Please select and "Clear" any data records you no longer need.

Help and Tools

Learn

What the double declining balance method is and how to calculate it.

What is Double Declining Balance Method?

The Double Declining Balance (DDB) Method is a system designed to accelerate the cost recovery of an asset's depreciable base. After all, most assets depreciate faster in their early years of service, and slower in their later years of service. The DDB method addresses that notion.

In fact, as the name suggests, the DDB method results in a first-year depreciation expense of double the amount that could be expensed using the straight-line method.

However, due to the way it's calculated, the DDB method of depreciating an asset rarely fully depreciates the asset by the end of the recovery period. Therefore most companies switch to the straight-line method during the final year(s) of the recovery period in order to fully depreciate the asset.

Another thing to keep in mind is that unlike the straight-line method, the DDB method ignores the salvage value in its calculations -- unless taking the full DDB depreciation for a given year would cause the book value to drop below the salvage value. In that case, only the excess of the depreciable base may be expensed for that year.

How to Calculate DDB

To calculate DDB, you first calculate the straight-line depreciation (SLD) expense percentage based on the acquisition cost (adjusted basis) of the asset -- while ignoring the salvage value -- and then double that percentage to arrive at the DDB percentage.

For example, if you purchased a machine costing $10,000, with a salvage value of $1,000 and a useful life of 5 years, the SLD rate would be equal to 100% divided by 5, or 20%. Next, double the SLD rate to get the DDB rate, which in this case would be 40%.

Therefore, the first year depreciation expense for the $10,000 machine would be equal to $4,000 (.40 X 10,000) -- provided the asset was placed in service on January 1, of that year.

For all remaining years, the DDB depreciation expense would be calculated by multiplying the book value (acquisition cost minus accumulated depreciation) by the 40% rate -- except in the case where that result would cause the book value to drop below the salvage value.

Example of How to Calculate Double Declining Depreciation

Referring to back to the machine example discussed earlier, if you expect the $10,000 machine to last for 5 years, with a salvage value of $1,000.00, and you place the machine in service in July of 2012, here is how you would calculate the double declining depreciation expense for the applicable years.

Step 1: DDB rate = 100% / 5 years x 2 = 40%
Step 2: 1st year depreciation rate = 6 months / 12 months = .5 x 40% = 20%
Step 3: 1st year depreciation expense = $10,000 x 20% = $2,000
Step 4: Subsequent years depreciation expense = book value * 40%.
Step 5: If necessary, adjust depreciation expense to preserve salvage value.

Here is the depreciation schedule for the above example, as generated by the double declining balance calculator:

Machine DDB Depreciation Schedule
#YearBeg
Val $
Beg
Val $
Begin
Value $
Beginning
Value $
%Deprec
Exp $
Deprec
Exp $
Deprec
Exp $
Depreciation
Expense $
Accum
Dep $
Accum
Dep $
Accum
Deprec $
Accumulated
Depreciation $
End
Val $
End
Val $
Ending
Value $
Ending
Value $
1201210,00020%2,0002,0008,000
220138,00040%3,2005,2004,800
320144,80040%1,9207,1202,880
420152,88040%1,1528,2721,728
520161,72840%6918,9631,037
620171,0374%379,0001,000

In the last line of the above depreciation schedule, you will note that the depreciation expense was adjusted downward so as not to depreciate the machine beyond its salvage value.

MACRS Depreciation

Please note that both the Straight-Line Depreciation Calculator and the Double Declining Balance Calculator are basically included here as learning tools and do not necessarily calculate depreciation in accordance with the IRS's Modified Accelerated Cost Recovery System (MACRS) methodology. For that you will want to visit the MACRS Depreciation Calculator.

Adjust Calculator Width:

Move the slider to left and right to adjust the calculator width. Note that the Help and Tools panel will be hidden when the calculator is too wide to fit both on the screen. Moving the slider to the left will bring the instructions and tools panel back into view.

Also note that some calculators will reformat to accommodate the screen size as you make the calculator wider or narrower. If the calculator is narrow, columns of entry rows will be converted to a vertical entry form, whereas a wider calculator will display columns of entry rows, and the entry fields will be smaller in size ... since they will not need to be "thumb friendly".

Show/Hide Popup Keypads:

Select Show or Hide to show or hide the popup keypad icons located next to numeric entry fields. These are generally only needed for mobile devices that don't have decimal points in their numeric keypads. So if you are on a desktop, you may find the calculator to be more user-friendly and less cluttered without them.

Stick/Unstick Tools:

Select Stick or Unstick to stick or unstick the help and tools panel. Selecting "Stick" will keep the panel in view while scrolling the calculator vertically. If you find that annoying, select "Unstick" to keep the panel in a stationary position.

If the tools panel becomes "Unstuck" on its own, try clicking "Unstick" and then "Stick" to re-stick the panel.