Microsoft Office Tutorials and References

In Depth Information

**Syntax**

Although the name of this method contains the world double, Microsoft

covered the possibility of other multipliers. There is a 150DB method that

multiplies the rate by 1.5 instead of 2. To calculate 150DB, you use 1.5 as the

fifth argument. If no fifth argument is supplied, the fifth argument is assumed

to be 2, resulting in DDB.

Syntax

DDB(cost,salvage,life,period,factor)

The DDB function returns the depreciation of an asset for a specified period

using the double-declining-balance method or some other specified method.

This function takes the following arguments:

•
cost

cost
—
This is the initial cost of the asset.

•
salvage

salvage
—
This is the value at the end of the depreciation period.

•
life

life
—
This is the number of periods over which the asset is being de-

preciated.

•
period

period
—
This is the period for which you want to calculate the de-

preciation. The periodmust use the same units as life.

•
factor

factor
—
This is the rate at which the balance declines. If factoris

omitted, it is assumed to be 2, which is the double-declining-balance

method.

Tip

Keep in mind that all five of the arguments listed must be positive

numbers.

To allow DDB to work, you need to abandon the method at some point and

switch to a straight-line method for the remaining asset value. If you at-

tempt to use DDB for the entire life of the asset, you will not write off enough

of the value.

Figure 13.11
illustrates how DDB fails to accumulate $500,000 of depre-

ciation. You might want to use the newer VDB method, which automatically

switches for you. Column D in
Figure 13.11
shows this method.