Join Curt Frye for an in-depth discussion in this video DB: Calculating depreciation using the declining balance method, part of Excel 2010: Financial Functions in Depth.
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 with the declining…balance method in Excel.…The declining balance method is so named because it reduces an asset's value by…the amount it depreciated in the previous years.…You then calculate 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, which is in cell B7, is what you pay for the asset.…The Salvage Value, which is in cell B9, is what you can sell the asset for as scrap.…And then next we have the Economic Life, which in this case is assumed to be 7 years.…And then you have the Period and that is the year in the depreciation schedule…and I have a series of those years set up here in cells D6 through D12.…So I'll be calculating depreciation for years 1 through 7.…There is one final argument and that is whether you're going monthly or yearly.…
- Analyzing loans, payments, and interest
- Discovering the interest rate of an annuity
- Determining depreciation using the straight line, declining balance, double-declining balance, and other methods
- Calculating the future value of an investment with variable returns
- Finding the discount rate of a security
- Converting between fractional prices and decimal prices
- Determining the yield of securities that pay interest periodically
Skill Level Intermediate
Q: Where can I learn more about Excel formulas?
A: Discover more on this topic by visiting Excel formulas on lynda.com.
Managing and Analyzing Data in Excel 2010with Dennis Taylor1h 32m Appropriate for all
1. Analyzing Loans, Payments, and Interest
2. Calculating Depreciation
3. Determining Values and Rates of Return
4. Calculating Bond Coupon Dates and Security Durations
5. Calculating Security Prices and Yields
6. Calculating Prices and Yields of Securities with Odd Periods
Additional resources1m 5s
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