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How to Calculate Double Declining Depreciation in Excel

In this article, we will discuss the calculation process of Double Declining Depreciation in Excel. The Double Declining Depreciation is one of the accelerated methods of calculating depreciation. Here, the depreciation percentage is a multiple of the straight-line depreciation. We often need this method to calculate the depreciation of an asset. This results in good estimations for assets with a long-life span. In this instance, we will calculate the Double Declining Depreciation in 2 ways.


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2 Ways to Calculate Double Declining Depreciation in Excel

In this article, we will calculate the Double Declining Depreciation in 2 ways. Firstly, we will use the formula for the method manually in Excel to calculate the depreciation. Then, we will use the DDB function to do the task.

1. Using Arithmetic Formula

In this method, we will calculate the Double Declining Depreciation in Excel manually. Here, we have an asset which has an original cost of $20000 and a salvage value of $8000 with a life span of 4 years. We will calculate its depreciation using the Double Declining Depreciation method.

double declining depreciation excel

Steps:

  • Firstly, select the D9 cell and type,
=1/$C$6
  • Secondly, hit Enter.
  • Consequently, we will get the Depreciation Percentage for period one.

writing percentage formula to calculate double declining depreciation in excel

  • Thirdly, go to the Number group in the Home tab and make the number a percentage.

changing number type to calculate double declining depreciation in excel

  • Then, click on the E9 cell and enter,
=C9*D9
  • Hit Enter after that.
  • As a result, we will get the Depreciation Percentage for the asset.

calculating depreciation expense to calculate double declining depreciation in excel

  • Then, select the F9 cell and write,
=E9
  • Press Enter.

  • Finally, choose the G9 cell and enter the following formula,
=C9-E9
  • Then, press Enter.
  • As a result, we will get the End Value for the first year.

calculating end value to calculate double declining depreciation in excel

  • After that, click on the C10 cell and enter the following,
=G9
  • Hit the Enter button afterwards.

  • Next, choose the E10 cell and type the following formula in the cell,
=C10*D10
  • As a result, we will get the Depreciation Expense for year two.

  • Thereafter, click on the F10 cell and type,
=F9+E10

determining accumulated depreciation to calculate double declining depreciation in excel

  • Again, select the G10 cell and enter,
=C10-E10
  • As a result, we will get the End Value for the year 2.

  • Repeat the same process for the next upcoming years unless the End Value becomes less than or equal to the salvage value.

  • In this case, the end value becomes less than $8000 at year 4.
  • Here, we will change the Depreciation Percentage
  • So, choose the D12 cell and write the following,
=1-(G12/C12)
  • Then, hit Enter.

  • Now, repeat the same calculations for the Depreciation Expense, Accumulated Depreciation and End Value.
  • Finally, we will get the salvage value for the asset after 4 years.

Read More: How to Apply Declining Balance Depreciation Formula in Excel


2. Applying DDB Function

The DDB function  is the dedicated function to calculate depreciation of an asset using the Double Declining Depreciation method in Excel. The function takes cost, salvage value, life span and period of depreciation as arguments. In this method, we will utilize this function to do the calculation.

Steps:

  • To begin with, select the D9 cell and enter,
=DDB($C$4,$C$5,$C$6,B9)
  • Then, press Enter.
  • As a result, we will get the Depreciation Expense for the asset for year one.

applying ddb function to calculate double declining depreciation in excel

  • After that, choose the E9 cell and write the following formula,
=C9-D9
  • Hit Enter.
  • This will result in the End Value for year one.

  • Next, choose the C10 cell and enter,
=E9
  • Press Enter after that.

  • Thereafter, choose the D10 cell and type,
=DDB($C$4,$C$5,$C$6,B10)
  • Then, hit Enter.
  • Consequently, we will have the Depreciation Expense for the year two.

  • Afterward, click on the E10 cell and write the following formula,
=C10-D10
  • Press Enter.

  • Repeat the process for the next 2 years.

  • Finally, select the D13 cell and enter the formula below,
=SUM(D9:D12)
  • Press the Enter button after that.
  • As a result, we will get the Total Depreciation for the asset using the double depreciation method by applying the SUM function.

calculating total depreciation to calculate double declining depreciation in excel

Read More: How to Create Fixed Asset Depreciation Calculator in Excel


Conclusion

In this article, we have talked about calculating Double Declining Depreciation in Excel in two ways. These methods will allow users to calculate the depreciation of their assets using the double depreciation method easily in Excel. If you have any questions regarding this essay, feel free to let us know in the comments. Also, if you want to see more Excel content like this, please visit our website Exceldemy.Com and unlock a great resource for Excel-related content.


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Adnan Masruf

Adnan Masruf

I am an engineering graduate. I graduated from Bangladesh University of Engineering and Technology(BUET), one of the top universities in Bangladesh from department of Naval Architecture & Marine Engineering with a major in structure. I am an avid reader of fiction especially fantasy. I also keep myself abreast of the recent developments in science and technology. I believe diligence will eventually pay off and luck tends to favor those who work hard.

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