Join Curt Frye for an in-depth discussion in this video DDB: Calculating depreciation using the double-declining balance method, part of Excel 2010: Financial Functions in Depth.
The declining balance method of calculating depreciation enables companies…to accelerate the rate at which they claim the tax benefits inherent in…asset depreciation.…As the name implies, the double declining balance depreciation method doubles the…rate at which the declining balance method calculates an asset's depreciation.…To calculate depreciation using the double declining balance method, you use the…DDB function and the DDB function has five arguments.…The first is the Initial Cost of the asset, in this case 34 million.…
Then the Salvage Value and that is the value for which you can sell the asset as…scrap at the end of its economic life. That's $1 million.…Then we have the Economic Life and for a building that's assumed to be 30 years.…And then the fourth argument is the Period and in this case it is years.…So I have a series of years in cells d6 through d15, for years 1 through 10 of…this 30-year economic life.…And then finally we have cells to calculate the depreciation using the DDB function.…
- 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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