Double Declining Balance
$
$
yrs
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.
💡
Tip: Accelerated depreciation is purely an accounting/tax timing difference — it doesn't change total depreciation over an asset's life. It just moves deductions earlier, improving cash flow via earlier tax savings.
- 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
$40,000 asset, 5-year life, $0 salvage=Year 1: $16,000 | Year 2: $9,600 | Year 3: $5,760DDB rate = 40%
| Year | Straight-Line | DDB | DDB Book Value |
|---|---|---|---|
| 1 | $20,000 | $40,000 | $60,000 |
| 2 | $20,000 | $24,000 | $36,000 |
| 3 | $20,000 | $14,400 | $21,600 |
| 4 | $20,000 | $10,800* | $10,800 |
| 5 | $20,000 | $10,800* | $0 |
⭐
Fun Fact
* Switch to straight-line in year 4 when SL ($10,800) exceeds DDB ($8,640). Technology companies often prefer accelerated depreciation because their equipment (servers, laptops) actually does lose value quickly.
References
🔒
୧୦୦% ମାଗଣା
ପଞ୍ଜୀକରଣ ଆବଶ୍ୟକ ନାହିଁ
✓
ସଠିକ
ଯାଞ୍ଚ ହୋଇଥିବା ସୂତ୍ର
⚡
ତତ୍କ୍ଷଣ
ତତ୍କ୍ଷଣ ଫଳ
📱
ମୋବାଇଲ୍ ଅନୁକୂଳ
ସମସ୍ତ ଡିଭାଇସ୍