How this number is made
Double-declining balance takes twice the straight-line rate and applies it to the remaining book value, not to the original cost. This page does one year. Next year you type the new book value. It does not switch to straight line near the end, which the full method often does.
- Book value is the cost minus depreciation already taken.
- Useful life is the life used to set the rate, even if you are only computing this year.
Formula
Rate = 2 ÷ useful life. This year’s depreciation = book value × rate.
Worked example
With the figures already in the form, this year’s depreciation is $4,000.00.
Questions
Why only one year?
The balance changes every year. Showing one year forces the book value into the open instead of hiding a long schedule.
Does it stop at salvage?
This one-year view does not know your salvage. Do not depreciate below the salvage you intend to keep.