# How to Use the WDV Method of Depreciation in Excel

## Overview of Depreciation & WDV Method

### What Is Depreciation?

Depreciation is an indicator of a decrease in the amount of any assets (i.e. products, goods, services) over a  period of time.

### What Is the WDV (Written Down Value) Method?

WDV stands for Written Down Value method in terms of calculating depreciation. Two methods are frequently used to calculate depreciation.

1. Straight Line Method (SLM)
2. Written Down Value (WDV)

This method is also known as Diminishing Balance Method or Declining Balance Method.

WDV Formula:

Written Down Value Method = (Cost of Asset – Salvage Value of the Asset) * Rate of Depreciation (%)

## Common Uses of the WDV Method of Depreciation in Excel

In the sample dataset the initial cost of a specific asset of a company is \$50000. The rate of depreciation is  20% and the residual value is  \$7000.

### Calculating Depreciation with the WDV Formula

In the dataset, the rate of depreciation is mentioned.

Steps:

• Here, select a cell to calculate depreciation and enter the WDV formula.

`=(C5-C6)*C7`

Here,

• C5 = Initial Cost
• C6 = Residual Value
• C7 = Rate of Depreciation

• Press ENTER to see the result.

### Finding the Yearly Final Value with Depreciation

• Enter the following formula.

`=(C5-C6)-C8`

Here,

• C5 = Initial Cost
• C6 = Residual Value
• C8 = Depreciation

• Press ENTER to see the result.

To find the final price after consecutive years, multiply the first year end price by the depreciation rate.

`=20%*D5`

Here,

• D5 = Final value after first year

By subtracting the depreciation cost from the first year’s final price, you will get the price after the 2nd year.

`=D5-C6`

Here,

• D5 = Final Price after 1st year
• C6 = Depreciation of 2nd year

You can find the depreciation and year end value for consecutive years utilizing the depreciation and yearly final value of previous years.

Note: Here, the colored texts show the value used in determining the depreciation with the WDV formula.

Practice here.

## Related Articles

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Rafiul Hasan, holding a BSc in Naval Architecture and Marine Engineering from Bangladesh University of Engineering & Technology, contributes significantly to the ExcelDemy project with almost 1.6 years of dedicated work. Currently an Excel and VBA Content Developer, he has a passion for problem-solving. Authoring over 100 articles for ExcelDemy showcases expertise in Microsoft Office Suites and Data Analysis. In addition to content development, Rafiul actively engages with the ExcelDemy forum, offering valuable solutions to user queries and... Read Full Bio

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