How to Mathematically Calculate Depreciation in Business


show more DB: Calculating depreciation using the declining balance method provides you with in-depth training on Business. Taught by Curt Frye as part of the Excel 2010: Financial Functions in Depth show less
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DB: Calculating depreciation using the declining balance method

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...

DB: Calculating depreciation using the declining balance method
Video duration: 3m 10s 2h 18m Intermediate

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DB: Calculating depreciation using the declining balance method provides you with in-depth training on Business. Taught by Curt Frye as part of the Excel 2010: Financial Functions in Depth

Subjects:
Business IT
Software:
Excel
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