Advanced Excel Financial - DDB Function

Description

The DDB function returns the depreciation of an asset for a specified period using the double-declining balance method or some other method you specify.

Syntax

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

Arguments

Argument	Description	Required/ Optional
Cost	The initial cost of the asset.	Required
Salvage	The value at the end of the depreciation (sometimes called the salvage value of the asset). This value can be 0.	Required
Life	The number of periods over which the asset is being depreciated (sometimes called the useful life of the asset).	Required
Period	The period for which you want to calculate the depreciation. Period must use the same units as life.	Required
Factor	The rate at which the balance declines. If factor is omitted, it is assumed to be 2 (the doubledeclining balance method).	Optional

Notes

All five arguments must be positive numbers.
The double-declining balance method computes depreciation at an accelerated rate. Depreciation is highest in the first period and decreases in successive periods. DDB uses the following formula to calculate depreciation for a period −

Min ((cost - total depreciation from prior periods) * (factor/life), (cost - salvage - total depreciation from prior periods))
Change factor if you do not want to use the double-declining balance method.
Use the VDB Function if you want to switch to the straight-line depreciation method when depreciation is greater than the declining balance calculation.
If either the specified cost or the specified salvage argument is < 0, DDB returns #NUM! error value.
If any of the specified life, period or factor arguments is ≤ 0, DDB returns #NUM! error value.
If the specified period > life, DDB returns #NUM! error value.
If any of the specified arguments is not a numeric value, #VALUE! error value.

Applicability

Excel 2007, Excel 2010, Excel 2013, Excel 2016

Example

advanced_excel_financial_functions.htm