Calculators

Financial

Depreciation

Calculator Use

Use this calculator to calculate the accelerated depreciation by Double Declining Balance Method or 200% depreciation. Create and print full depreciation schedules. For other factors besides double use the Declining Balance Method Depreciation Calculator.

Inputs

Asset Cost

the original value of your asset or the depreciable cost; the necessary amount expended to get an asset ready for its intended use

Salvage Value

the value of the asset at the end of its useful life; also known as residual value or scrap value

Useful Life

the expected time that the asset will be productive for its expected purpose

Placed in Service

select the month and enter the year the asset started being used for its intended purpose

Year

enter 1 or 4 digits; enter a four digit year to use your actual years OR enter a 1 to list years using digits 1 through the last year

Fiscal Year

The starting and ending months for your fiscal year, your tax year. For personal tax filing with the IRS, your likely fiscal year is Jan-Dec, a regular calendar year. Some companies may have fiscal years that run, for example, Sep-Aug. The US Government fiscal year is Oct-Sep.

Convention

choose Full-Month, Mid-Month, Mid-Year or Mid-Quarter Convention; if you don't know, keep it at the common Full-Month

Sample Full Depreciation Schedule

Cost: $575,000.00, Salvage: $5,000.00
Life: 10 years, Convention: Full-Month
First Year: 5 months

Double Declining Balance Depreciation Formulas

The double declining balance method is an accelerated depreciation method. Using this method the Book Value at the beginning of each period is multiplied by a fixed Depreciation Rate which is 200% of the straight line depreciation rate, or a factor of 2.  To calculate depreciation based on a different factor use our Declining Balance Calculator.

The double declining balance calculation does not consider the salvage value in the depreciation of each period however, if the book value will fall below the salvage value, the last period might be adjusted so that it ends at the salvage value.  When double declining balance method does not fully depreciate an asset by the end of its life, variable declining balance method might be used instead.

1. Straight-Line Depreciation Percent = 100% / Useful Life
2. Depreciation Rate = 2 x Straight-Line Depreciation Percent
3. Depreciation for a Period = Depreciation Rate x Book Value at Beginning of the Period
4. If the first year is not a full 12 months and is a number M months, the first and last years will be calculated
   • First Year Depreciation Rate = M/12 x Depreciation Rate
   • Last Year Depreciation Rate = (12-M)/12 x Depreciation Rate

Double Declining Balance Depreciation Example

An asset for a business cost $1,750,000, will have a life of 10 years and the salvage value at the end of 10 years will be $10,000.  You calculate 200% of the straight-line depreciation, or a factor of 2, and multiply that value by the book value at the beginning of the period to find the depreciation expense for that period.

1. Straight-Line Depreciation Percent = 100% / 10 years = 10% / year
2. Depreciation Rate = 2 x 10% = 20% / year
3. Depreciation for a Period = 20% x Book Value at Beginning of the Period
   • Depreciation for Period 1 = 20% x $1,750,000 = $350,000
   • For Periods 2 and greater, depreciation is 20% x ($1,750,000 - Accumulated Depreciation )
   • Depreciation for Period 2 = 20% x ($1,750,000 - $350,000 ) =  $280,000
   • Depreciation for Period 3 = 20% x ($1,750,000 - $630,000 ) = $224,000
   • Etc ....

Full-Month, Mid-Month, Mid-Year, Mid-Quarter Conventions

Some accounting systems allow for Full-Month, Mid-Month, Mid-Year or Mid-Quarter Conventions.

• For full month convention, for example, an asset placed in service in October will have 3 months in the first year to cover all of October, November and December.
• For mid month convention, for example, an asset placed in service in October will have 2.5 months in the first year to cover 1/2 of October and all of November and December.
• For mid year convention, for example, will have 6 months in the first and last years.
• For mid quarter convention will have 1.5, 4.5, 7.5 or 10.5 for months in first year for service starting within the 4th, 3rd, 2nd or 1st quarter respectively.

Microsoft® Excel® Functions Equivalent: DDB

The Excel equivalent function for Double Declining Balance Method is DDB(cost,salvage,life,period,factor) will calculate depreciation for the chosen period. "factor" defaults to 2, double declining balance method.  Changing the value of "factor" can be accomplished using our Declining Balance Method Depreciation Calculator.

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