Excel DDB Function

If you want to follow along with this tutorial, please download the example spreadsheet.

Description

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

Syntax and arguments

Formula syntax

Arguments

Return Value

The DDB function returns a numeric value in currency format.

Errors

1. If the arguments are non-numeric value, the function returns #VALUE! error value.

2. If anyone of below occurs, the function returns ##NUM! error value:

• Cost < 0, or salvage < 0;
• Life or period <= 0;
• Factor <=0;
• Period > life.

Remarks

1. Both of the life and period must be in the same unit. For instance, the life is calculated in yearly, the period must be calculated in yearly too.

2. The double-declining balance method computes the depreciation of asset at an accelerated rate. In the first period, depreciation is the highest, and then decreases in following periods. The DDB function use below formula to calculate the depreciation for a period:

Min( (cost - total depreciation from prior periods) * (factor/life), (cost - salvage - total depreciation from prior periods) )

Factor can be changed if you do not want to use the double-declining balance method for depreciation calculation.

Use the VDB function if you want to switch to the straight-line depreciation method when depreciation is greater than the declining balance calculation.

Version

Excel 2003 or later

Usage and Examples

Example 1 when argument factor is omitted

Supposing in the table B3:G8 which lists the cost, salvage, life and periods (1-5), and factors are omitted (will take it as 2), to calculate the depreciation of the asset in each period, please use below formula:

=DDB(C3,C4,C5,C6))

Press Enter key to get the depreciation of first period.

Then select first result, drag autofill handle over the cells to calculate the depreciations in other periods.

Example 2 when argument factor is other number

Supposing in the table B3:G8 which lists the cost, salvage, life and periods (1-5), and the factor is 3, to calculate the depreciation of the asset in each period, please use below formula:

=DDB(C3,C4,C5,C6,C7)

Press Enter key to get the depreciation of first period.

Then select first result, drag autofill handle over the cells to calculate the depreciations in other periods.

Relative Functions:

• Excel CUMIPMT Function
  The CUMIPMT function returns the cumulative interest paid on a load between the start period and end period.

• Excel DB Function
  The DB function returns the depreciation of an asset for a specified period by using a fixed-declining balance method.

• Excel ACCRINTM Function
  The ACCRINTM function returns the accrued interest for a security that pays interest at maturity.

• Excel AMORDEGRC Function
  The AMORDEGRC function returns the linear depreciation of an asset for each accounting period by applying a depreciation coefficient based on the lifetime of the assets.