How to use Excel DDB Function

Introduction:-

DDB function in excel is a financial function. It is used to return the depreciation value of an asset during a mentioned period by using double declining balance method or other methods mentioned in Factor argument. It is a worksheet function and can be entered in the cell in which value is required.

Syntax:-

=DDB (cost, salvage, life, period, Factor)

Arguments:-

  • Cost: It is the initial price of the asset.
  • Salvage: Value of asset after depreciation.
  • Life: It is the period in which asset is depreciated.
  • Period: Period for which depreciation will be calculated.
  • Factor: It is the rate of depreciation of the balance. Its default value is 2.

Keynotes:-

  • Microsoft Excel stores dates as serial numbers. By default, January 1, 1900 is serial number 1 and corresponding dates have serial number greater than 1.
  • The double-declining balance method calculates depreciation at an accelerated rate. DDB function uses the following formulas to calculate depreciation for a period:

Min( (cost – depreciation of prior periods) * (factor/life), (cost – salvage – depreciation of prior periods)

  • Factor argument can be used to change the declining rate. Its default rate is 2.

Examples

In this example, various arguments are entered in column A and their values are entered in column B , the required depreciation value is entered using formula DDB in column D.

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