Double declining balance (DDB) is the most popular accelerated depreciation method. It takes the straight-line rate, doubles it, and applies that percentage to the asset’s remaining book value each year. The result is a large write-off up front that tapers off as the asset ages. This calculator builds the full DDB schedule, enforces the salvage value floor, handles a partial first year and shows straight-line next to every year for comparison.
How to use the DDB calculator
- Enter the asset cost and expected salvage value.
- Enter the useful life in whole years.
- Choose the months in service in the first year if it was bought mid-year.
- Optionally tick switch to straight-line to move to even charges once they exceed the DDB amount.
Double declining balance formula
The min() is the salvage floor. In the final year of the life, the schedule takes whatever remains above salvage so the asset ends exactly at its salvage value.
Worked example
A delivery van costs $30,000, has a $2,000 salvage value and a 5-year life. The straight-line rate is 20%, so the DDB rate is 40%.
| Year | Beginning book value | DDB depreciation | Ending book value | Straight-line |
|---|---|---|---|---|
| 1 | $30,000.00 | $12,000.00 | $18,000.00 | $5,600.00 |
| 2 | $18,000.00 | $7,200.00 | $10,800.00 | $5,600.00 |
| 3 | $10,800.00 | $4,320.00 | $6,480.00 | $5,600.00 |
| 4 | $6,480.00 | $2,592.00 | $3,888.00 | $5,600.00 |
| 5 | $3,888.00 | $1,888.00 | $2,000.00 | $5,600.00 |
| Total | $28,000.00 | $28,000.00 |
DDB records $19,200 in the first two years against $11,200 under straight-line — $8,000 more expense early on, balanced by exactly $8,000 less in years 3–5. Year 5 is the final-year catch-up: 40% of $3,888 would be $1,555.20, so the schedule takes the full $1,888 that remains above salvage.
Partial first year
If the van went into service with 6 months left in the fiscal year, year 1 would be $30,000 × 40% × 6/12 = $6,000. Year 2 applies the full 40% to the new book value ($24,000 × 40% = $9,600), and the schedule runs into a sixth year to finish at $2,000.
Switch or no switch?
Two conventions exist:
- Textbook DDB applies 40% every year and lets the last year absorb the remainder. This is how many introductory accounting courses present it.
- DDB with a switch moves to straight-line over the remaining life as soon as that amount is larger. MACRS tax tables and the spreadsheet VDB function work this way, and it avoids an oversized final-year charge.
For this van, both give the same totals by year 5 because the switch would only occur in the final year. With higher salvage values or longer lives, the switch can happen earlier — compare them in the variable declining balance calculator.
Things to watch
- DDB rates above 100% are impossible: for a 1-year life the rate is capped so the asset is fully depreciated in year 1.
- Spreadsheet DDB functions do not plug the final year; they may leave book value above salvage.
- For a gentler acceleration, try the 150% declining balance option or sum-of-the-years’ digits.
Estimates for planning and coursework, not accounting or tax advice. Tax depreciation should follow IRS rules.
Frequently asked questions
What is the double declining balance formula?
Depreciation = book value at the start of the year × (2 ÷ useful life). For a 5-year asset the rate is 40%, so a $30,000 asset depreciates $12,000 in year 1, then 40% of the remaining $18,000, or $7,200, in year 2.
Why isn't salvage value subtracted first?
Declining-balance methods apply the rate to full book value, not to cost minus salvage. Salvage acts only as a floor: depreciation stops, or is reduced, once book value would fall below it.
What happens in the last year?
Textbook DDB takes whatever amount brings book value exactly to salvage in the final year. In the example, year 5 is $1,888 instead of 40% of $3,888. Optionally, the schedule can switch to straight-line earlier if that gives a larger deduction.
Can DDB depreciate below salvage value?
No. If 40% of book value would push the asset below salvage, the charge is reduced to land exactly on salvage, and depreciation stops.
Why do companies use double declining balance?
It matches assets that lose value or usefulness quickly, such as vehicles, computers and machinery, and it front-loads expenses. For taxes, MACRS uses the same 200% rate for many short-lived asset classes.