DB
Returns the depreciation of an asset for a specified period using the fixed-declining balance method.
DB(cost, salvage, life, period, [month])Arguments
costInitial cost of the assetsalvageValue at the end of the depreciationlifeNumber of periods over which the asset is depreciatedperiodThe period for which you want the depreciationmonthNumber of months in the first year (default 12)(optional)
=DB(10000, 1000, 5, 1)First year depreciation on a $10K asset with $1K salvage over 5 years
=DB(10000, 1000, 5, 2)Second year depreciation
- •Uses a fixed rate calculated from cost, salvage, and life
- •Depreciation decreases each year (declining balance)
- •Compare with SLN for straight-line and DDB for double-declining
- •Confusing DB with SLN or DDB - DB calculates a fixed-declining balance where depreciation decreases each year, unlike SLN's equal annual amounts or DDB's more aggressive double-declining approach
- •Forgetting that the month argument affects the first and last year's depreciation when the asset wasn't purchased at the start of the fiscal year, which can make results look inconsistent if overlooked
- •Expecting DB's depreciation amounts to sum exactly to (cost - salvage) - due to the fixed-rate calculation method, small rounding differences can occur across all periods
SLNCalculates straight-line depreciation with equal amounts each year, a simpler alternative to DB's declining-balance approach.DDBCalculates double-declining balance depreciation, an even more accelerated method than DB for the early years of an asset's life.SYDUses the sum-of-years-digits method, another accelerated depreciation approach with a different rate curve than DB.How is DB different from DDB?
Both are declining-balance methods, but DDB uses a fixed multiplier (typically double the straight-line rate) while DB calculates its own rate from cost, salvage, and life - DDB is generally more aggressive in the early years.
What does the month argument in DB actually do?
It specifies how many months of depreciation to apply in the first year, useful when an asset is purchased partway through the fiscal year rather than at the very start.
Why doesn't the sum of all DB periods exactly equal cost minus salvage?
DB uses a fixed depreciation rate applied to a shrinking balance each period, which can leave small rounding discrepancies across the full depreciation schedule.
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