Returns the depreciation of an asset for a specified period using the fixed-declining balance method.
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.
- 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
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
The example may be easier to understand if you copy it to a blank worksheet.
How to copy an example
- Create a blank workbook or worksheet.
- Select the example in the Help topic.
Note Do not select the row or column headers.
Selecting an example from Help
- Press CTRL+C.
- In the worksheet, select cell A1, and press CTRL+V.
- To switch between viewing the results and viewing the formulas that return the results, press CTRL+` (grave accent), or on the Formulas tab, in the Formula Auditing group, click the Show Formulas button.
||Lifetime in years
||Depreciation in first year, with only 7 months calculated (186,083.33)
||Depreciation in second year (259,639.42)
||Depreciation in third year (176,814.44)
||Depreciation in fourth year (120,410.64)
||Depreciation in fifth year (81,999.64)
||Depreciation in sixth year (55,841.76)
||Depreciation in seventh year, with only 5 months calculated (15,845.10)