Formulas and Functions

DB
The DB function returns the amount of depreciation of an asset for a specied period
using the xed-declining balance method.
DB(cost, salvage, life, depr-period, rst-year-months)
 cost: The initial cost of the asset. cost is a number value and must be greater than or
equal to 0.
 salvage: The salvage value of the asset. salvage is a number value and must be
greater than or equal to 0.
 life: The number of periods over which the asset is depreciating. life is a number
value and must be greater than 0. A decimal (fractional) part of life is allowed (for
example, 5.5 for a ve and one-half year depreciable life).
 depr-period: The period for which you want to calculate depreciation. depr-period
is a number value and must be greater than 0. Any decimal (fractional) part of depr-
period is ignored.
 rst-year-months:An optional argument specifying the number of months of
depreciation in the rst year. rst-year-months is a number value and must be in the
range 1 to 12. Any decimal (fractional) part of rst-year-months is ignored.
Example 1
Constructing a Depreciation Schedule
Assume you have just purchased an asset with a cost of $1,000, a salvage value of $100, and an
expected useful life of 4 years. Assume the asset will be depreciated 12 months in the rst year.
Using the DB function, you can construct a depreciation table showing the depreciation for each year.
cost salvage life depr-period rst-year-months
1000 100 4 12
First year (returns
$438)
=DB(B2, C2, D2,
E3, F2)
1
Second year
(returns $246.16)
=DB(B2, C2, D2,
E4, F2)
2
Third year (returns
$138.74)
=DB(B2, C2, D2,
E5, F2)
3
Fourth year
(returns $77.75)
=DB(B2, C2, D2,
E6, F2)
4
11 4 Chapter 6 Financial Functions