Formulas and Functions

DDB
The DDB function returns the amount of depreciation of an asset based on a specied
depreciation rate.
DDB(cost, salvage, life, depr-period, depr-factor)
 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.
 depr-factor: An optional number that determines the depreciation rate. depr-factor
is a number value. If omitted, 2 (200% for double-declining) is assumed. The higher
the number, the more rapid the depreciation. For example, if a depreciation rate of
one and one-half times the straight line depreciation is desired, use 1.5 or 150%.
Examples
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.
Using the DDB function, you can determine the depreciation for dierent periods and dierent
depreciation rates.
cost salvage life depr-period depr-factor
1000 100 4
First year, double-
declining balance
(returns $500)
=DDB(B2, C2, D2,
E3, F3)
1 2
Second year,
double-declining
balance (returns
$250)
=DDB(B2, C2, D2,
E4, F4)
2 2
Third year, double-
declining balance
(returns $125)
=DDB(B2, C2, D2,
E5, F5)
3 2
Fourth year,
double-declining
balance (returns
$25)
=DDB(B2, C2, D2,
E6, F6)
4 2
11 6 Chapter 6 Financial Functions