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Double Declining Balance (DDB) is an accelerated depreciation method that applies double the straight-line rate to the declining book value each year. It produces larger deductions early and smaller ones later — useful for assets that lose value quickly.
Trin-for-trin guide
- 1DDB rate = (2 / Useful life) × 100%
- 2Annual depreciation = Beginning book value × DDB rate
- 3Book value never goes below salvage value
- 4Often switched to straight-line when straight-line gives a higher deduction
Løste eksempler
Input
$40,000 asset, 5-year life, $0 salvage
Resultat
Year 1: $16,000 | Year 2: $9,600 | Year 3: $5,760
DDB rate = 40%
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