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Declining Balance Depreciation Calculator

Find an asset's declining-balance depreciation.

How it is calculated

A fixed percentage of the remaining book value is written off each year. With f = 1 − rate ÷ 100, the book value at the end of year n is cost × fⁿ, and the depreciation expense charged in year n is cost × fⁿ⁻¹ × rate ÷ 100. The rate is a percentage of 0 or more and below 100, cost must be above zero, and the year is rounded to a whole number of at least 1. The tool shows the expense of that single year and the book value at the end of it, not a whole schedule. It does not subtract a salvage value, does not stop depreciating at a floor, and does not switch to straight-line later, as some accounting or tax rules require. The rates and rules allowed for tax differ by country, so use the rate your own rules prescribe. The dollar sign is a display symbol only.

Worked example

An asset costs 25,000 and is depreciated at 40% a year. Ask for year 3. The factor is f = 0.6. Book value at the end of year 3 = 25,000 × 0.6³ = 25,000 × 0.216 = $5,400.00. Expense in year 3 = 25,000 × 0.6² × 0.40 = 25,000 × 0.36 × 0.40 = $3,600.00. Check year by year: year 1 writes off 10,000 (book 15,000), year 2 writes off 6,000 (book 9,000), year 3 writes off 3,600 (book 5,400).

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Common mistakes

  • Applying the rate to the original cost every year. That is straight-line depreciation; here the rate applies to the remaining book value.
  • Typing the rate as 0.40. It is a percentage, so 40 is correct; 0.40 means 0.4%.
  • Expecting the book value to reach the salvage value. With a fixed rate the book value never reaches zero, and no salvage value is subtracted, so you must stop depreciating yourself at the point your rules require.
  • Entering the double-declining rate wrongly. For a useful life of 5 years, straight-line is 20% and double-declining is 40%, not 20% × 2 years.
  • Reading the depreciation figure as the total written off. It is the expense for the chosen year only; total depreciation to date is cost minus the book value.

Sources

About this calculator

Declining balance depreciation applies a fixed rate to the asset's remaining book value each year rather than a fixed dollar amount, so the depreciation expense is largest in early years and shrinks over time: expense = book value at start of year × rate. The most common variant, double-declining balance (DDB), sets the rate to 2 / useful life (200% of the straight-line rate); here you simply enter the percentage rate yourself (for example 40 for a five-year life).

Accountants use this accelerated method because it matches how many assets — vehicles, machinery, computers — actually lose most of their value early in their useful life, and it's the basis for tax-depreciation systems like MACRS in the US. Financial analysts and small-business owners use it to project book value and tax deductions year by year, where the schedule often switches to straight-line depreciation near the end to depreciate fully down to salvage value; this calculator does neither, applying the rate throughout and subtracting no salvage value.

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  • Editorial team

    To decide when to switch to straight-line, compare each year's declining-balance figure with the remaining book value divided by the remaining years. For a 25,000 asset at 40% with a five-year life and no salvage, year 4 gives 2,160 declining but 5,400 ÷ 2 = 2,700 straight-line, so the switch pays off there. Which depreciation rules and country do you need to follow?

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