## Double Declining Balance Method Solution

STEP 0: Pre-Calculation Summary
Formula Used
Depreciation Expense = (((Purchase Cost-Salvage Value)/Useful Life Assumption)*2)*Beginning PP&E Book Value
DE = (((PC-SV)/ULA)*2)*BBV
This formula uses 5 Variables
Variables Used
Depreciation Expense - Depreciation Expense refers to the allocation of the cost of a tangible asset over its useful life.
Purchase Cost - Purchase Cost refers to the total amount of money expended by a company or individual to acquire goods or services from a supplier or vendor.
Salvage Value - Salvage Value refers to the estimated residual worth of an asset at the end of its useful life.
Useful Life Assumption - Useful Life Assumption refers to the estimated period over which an asset is expected to provide economic benefits to its owner.
Beginning PP&E Book Value - Beginning PP&E Book Value(Property, Plant, and Equipment) refers to the value of tangible assets owned by a company at the start of an accounting period.
STEP 1: Convert Input(s) to Base Unit
Purchase Cost: 340000 --> No Conversion Required
Salvage Value: 180000 --> No Conversion Required
Useful Life Assumption: 9 --> No Conversion Required
Beginning PP&E Book Value: 13 --> No Conversion Required
STEP 2: Evaluate Formula
Substituting Input Values in Formula
DE = (((PC-SV)/ULA)*2)*BBV --> (((340000-180000)/9)*2)*13
Evaluating ... ...
DE = 462222.222222222
STEP 3: Convert Result to Output's Unit
462222.222222222 --> No Conversion Required
462222.222222222 462222.2 <-- Depreciation Expense
(Calculation completed in 00.004 seconds)
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Created by Vishnu K
BMS College of Engineering (BMSCE), Bangalore
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## Double Declining Balance Method Formula

Depreciation Expense = (((Purchase Cost-Salvage Value)/Useful Life Assumption)*2)*Beginning PP&E Book Value
DE = (((PC-SV)/ULA)*2)*BBV

## What is Double Declining Balance Method?

The Double Declining Balance (DDB) method is a form of accelerated depreciation used in accounting to allocate the cost of a tangible asset more heavily in the earlier years of its useful life. This method assumes that an asset's utility or productivity declines more rapidly in its earlier years, making it appropriate to recognize higher depreciation expenses during those periods.
In the Double Declining Balance method, the depreciation expense for each period is calculated by applying a fixed percentage rate, which is double the straight-line depreciation rate, to the remaining book value of the asset. The remaining book value is the original cost of the asset minus the accumulated depreciation up to that point.
This method results in a higher depreciation expense in the early years of the asset's life, gradually decreasing over time until it reaches the asset's salvage value or its estimated residual value at the end of its useful life.

## How to Calculate Double Declining Balance Method?

Double Declining Balance Method calculator uses Depreciation Expense = (((Purchase Cost-Salvage Value)/Useful Life Assumption)*2)*Beginning PP&E Book Value to calculate the Depreciation Expense, The Double Declining Balance Method is an accelerated depreciation technique commonly used in accounting to allocate the cost of an asset more heavily in the earlier years of its useful life. Depreciation Expense is denoted by DE symbol.

How to calculate Double Declining Balance Method using this online calculator? To use this online calculator for Double Declining Balance Method, enter Purchase Cost (PC), Salvage Value (SV), Useful Life Assumption (ULA) & Beginning PP&E Book Value (BBV) and hit the calculate button. Here is how the Double Declining Balance Method calculation can be explained with given input values -> 462222.2 = (((340000-180000)/9)*2)*13.

### FAQ

What is Double Declining Balance Method?
The Double Declining Balance Method is an accelerated depreciation technique commonly used in accounting to allocate the cost of an asset more heavily in the earlier years of its useful life and is represented as DE = (((PC-SV)/ULA)*2)*BBV or Depreciation Expense = (((Purchase Cost-Salvage Value)/Useful Life Assumption)*2)*Beginning PP&E Book Value. Purchase Cost refers to the total amount of money expended by a company or individual to acquire goods or services from a supplier or vendor, Salvage Value refers to the estimated residual worth of an asset at the end of its useful life, Useful Life Assumption refers to the estimated period over which an asset is expected to provide economic benefits to its owner & Beginning PP&E Book Value(Property, Plant, and Equipment) refers to the value of tangible assets owned by a company at the start of an accounting period.
How to calculate Double Declining Balance Method?
The Double Declining Balance Method is an accelerated depreciation technique commonly used in accounting to allocate the cost of an asset more heavily in the earlier years of its useful life is calculated using Depreciation Expense = (((Purchase Cost-Salvage Value)/Useful Life Assumption)*2)*Beginning PP&E Book Value. To calculate Double Declining Balance Method, you need Purchase Cost (PC), Salvage Value (SV), Useful Life Assumption (ULA) & Beginning PP&E Book Value (BBV). With our tool, you need to enter the respective value for Purchase Cost, Salvage Value, Useful Life Assumption & Beginning PP&E Book Value and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
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