How Do You Use Excels DDB Function?
Excel’s DDB function determines an asset’s depreciation over a specified period of time. The acronym “DDB” stands for double-declining balance because this is the most common method used by this function, although it may use any specified method of calculating depreciation. Learn the syntax of DDB. It is DDB(cost,salvage_value,lifetime,period,[factor]) where cost is the asset’s initial value, salvage_value is the asset’s final value, lifetime is the number of periods over which to depreciate the asset (also called the asset’s useful life) and period is the time over which the depreciation is being calculated. Include factor as an optional argument to indicate the rate of the decline in balance. It defaults to 2 which represents the double declining balance method. This method calculates depreciation at an accelerated rate, meaning that it begins at its maximum value and decreases with each successive period. Calculate DDB with the following formula: Min((cost – depreciation from previo
