# DDB – Double Declining Balance Depreciation

The double declining balance depreciation method is used to depreciate an asset more quickly during the beginning of its life than at the end. Unlike the straight-line method, the depreciation expense is not the same for every period. Instead, the depreciation expense declines each successive period, as the function’s name indicates.

See a table comparing the different depreciation amounts using all of the methods.

## Purpose of the DDB Function

To return the value of one period of double declining balance depreciation expense.

## Similar Functions

SLN – Straight-line depreciation SYD – Sum-of-the-years digits depreciationDB – Declining balance depreciation

## Syntax

`=DDB(cost,salvage,life,period,[factor])`

• `cost` – Acquisition cost of the asset. The acquisition cost includes the purchase price and costs associated with its acquisition, such as freight and sales tax.
• `salvage` – Amount you expect to receive in exchange for the asset at the end of its useful life. Typically, this is zero. An example of a case where this is not zero is an automobile’s expected trade-in value.
• `life` – The number of periods you expect the asset to be in service.
• `period` – The period for which you are calculating depreciation expense.
• `[factor]` – OPTIONAL. A factor used to increase depreciation. The default value is 2. Use this to increase or decrease the depreciation rate with a higher number making the earlier amounts larger.
• Note: The `life` and `period` must be in the same units (either months or years).

## Examples

### Example 1 – DDB in Years with Salvage Value

You purchase an automobile for \$40,000 that you expect to last three years and have a trade-in value of \$4,000.

The depreciation expense is large in the first period and quite small by the third period. This pattern would be appropriate for an asset that provides most of its value at the beginning of its useful life.

### Example 2 – DDB in Months with a Salvage Value

You purchase a laptop computer for €3,000 and expect it to last 36 months. You expect it to be worth €150 at the end of the three years.

Note that we used months in the above table instead of years. The DDB function works with any type of period, but it would typically be months or years.

### Live Examples in Sheets

Go to this spreadsheet for the examples of the DDB function shown above that you can study and use anywhere you want.