Related Topics:
	Function Wizard Functions

DB

Description: Returns the asset depreciation for a period using the fixed declining balance method.

Syntax: DB(Cost, Salvage, Life, Period, [Month])

• Cost is the initial cost of the asset.

• Salvage is the value at the end of the depreciation (sometimes called the salvage value of the asset).

• Life is the number of periods over which the asset is being depreciated (sometimes called the useful life of the asset).

• Period is the period for which you want to calculate the depreciation. Period must use the same units as life.

• Month is the number of months in the first year. If Month is omitted, it is assumed to be 12.

Remarks:

• The fixed-declining balance method computes depreciation at a fixed rate. DB uses the following formulas to calculate depreciation for a period:

(cost - total depreciation from prior periods) * rate

where:

rate = 1 - ((salvage / cost) ^ (1 / life)), rounded to three decimal places

• Depreciation for the first and last periods is a special case. For the first period, DB uses this formula:

cost * rate * month / 12

• For the last period, DB uses this formula:

((cost - total depreciation from prior periods) * rate * (12 - month)) / 12

Example:

Suppose a factory purchases a new machine. The machine costs $1,000,000 and has a lifetime of six years. The salvage value of the machine is $100,000. The following examples show depreciation over the life of the machine. The results are rounded to whole numbers.

• DB(1000000, 100000, 6, 1, 7) = $186,083 [the depreciation in first year, with only 7 months calculated]

• DB(1000000, 100000, 6, 2, 7) = $259,639 [the depreciation in second year]

• DB(1000000, 100000, 6, 7, 7) = $15,845 [the depreciation in seventh year, with only 5 months calculated]