Calculating declining balance depreciation


show more Calculating declining balance depreciation provides you with in-depth training on Business. Taught by Curt Frye as part of the Excel 2007: Financial Analysis show less
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Calculating declining balance depreciation

The Declining Balance method of calculating depreciation accelerates the rate at which an asset loses its value over time. You use the DB function to calculate depreciation in Excel. The Declining Balance method reduces an assets value by the amount it depreciated in the previous years. Excel then calculates the new depreciation based on that lower value. Hence the name Declining Balance Method. The DB function has four arguments, Cost, Salvage Value, Economic Life and Period.

The cost is the asset's initial cost. Salvage Value is what the asset will sell for when it becomes economically obsolete. Economic Life is the number of years that the asset will be economically viable and Period is the time frame for which you are calculating depreciation. Unless you are dealing with very short-lived assets, that period is almost always a year. So, to complete the formula we have =DB, the Initial Cost is in cell B7, and because we are copying the formula further down, the column in the table, we&...

Calculating declining balance depreciation
Video duration: 3m 24s 2h 18m Intermediate

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Calculating declining balance depreciation provides you with in-depth training on Business. Taught by Curt Frye as part of the Excel 2007: Financial Analysis

Subject:
Business
Software:
Excel
Author:
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