Declining Balance

For this type of calculation, the declining balance percentage represents a percentage of NBV.

NBV x DB%

When you are depreciating an asset with a declining balance method, the life of the asset is irrelevant. Note that if you used this method alone, an asset would never be fully depreciated. To fully depreciate an asset using the Declining Balance method, you must enter either a book low limit or an end depreciation date. When an asset's NBV reaches its book low limit or end depreciation date, the remaining value is taken in depreciation for that year.

Declining Balance Example

The following table shows data that is used in the depreciation example that follows it.

Attributes	Data
Asset Cost	10,000.00 USD
Salvage Value	1,000.00 USD (not used for calculating asset basis)
Asset Basis	10,000.00 USD
Life	60 periods (5 years)
Begin Depr Dt.	01/01/94
Declining Balance %	20%

Depreciation Results

The following table shows yearly depreciation and the calculation that is used to produce the result.

Year	Depreciation Calculation	Depreciation Expense
1994	10,000 x (20/100)	= 2000.00
1995	8000 x (20/100)	= 1600.00
1996	6400 x (20/100)	= 1280.00
1997	5120 x (20/100)	= 1024.00
1998	4096 x (20/100)	= 819.20
1999	3276.80 x (20/100)	= 655.54
2000	2621.21 x (20/100)	= 524.24

Calculations continue in this manner until the book low limit or end depreciation date is reached. If no book low limit or end depreciation date is specified, the asset never fully depreciates.