Accelerated Depreciation Converter

Accelerated Depreciation Calculator

Input Fields

Initial asset cost

C

$

Total cost of the asset at the time of purchase

Salvage value

S

$

Estimated residual value of the asset at the end of its useful life

Useful life

L

Expected number of years the asset will be in use

Year

Y

The year for which you want to calculate depreciation

CalculateReset

Calculate automaticallyIf enabled, the result will update automatically when you change any value.

Your Results

Depreciation for Year

Book Value at Beginning of Year

Book Value at End of Year

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Double Declining Balance Formula

$$\text{Depreciation}_{\text{year}} = \text{Book Value}_{\text{start}} \times \left(\frac{2}{\text{Useful Life}}\right)$$

Explanation:
The Double Declining Balance method calculates depreciation by applying a constant rate (twice the straight-line rate) to the asset’s remaining book value each year. This leads to higher depreciation expenses in the early years of an asset’s life.

Accelerated depreciation methods like DDB and SYD are commonly used to reduce taxable income by front-loading depreciation expenses. These methods are particularly useful for assets that lose value quickly, such as electronics or vehicles. Compared to straight-line depreciation, they provide a more realistic reflection of an asset’s diminishing utility.

Example Variables:

• Initial cost of asset: $10,000
• Useful life: 5 years
• Depreciation rate: 40% (for DDB)

Calculation Steps:

1. Determine straight-line rate = 1 / useful life
2. Multiply by 2 (for DDB)
3. Apply to book value each year