There are numerous method of depreciating the fixed assets. One of them is Double declining balance. In our earlier post regarding double declining,we learnt how to do it using manual work. But, now our focus is to use Microsoft Excel to work out all the calculation for DDB depreciation. We use the following formula in Excel:
DDB( cost, salvage, life, period, [factor] )
ZL is a manufacturing concern. It has fixed asset of $ 500,000. It is considering depreciating the fixed asset using the DDP method. The useful life of the asset is 05 years with a salvage value of $ 20,000. Prepare a depreciation schedule using MS Excel via double declining method.
We have inputted Initial cost, salvage value and useful life in cell B1, B2 & B3. In cell B6, we have inputted the DDB formula to calculate the depreciation expense. Later, we drag it down to calculate the remaining periods's depreciation expense.
Formula, we used is as follows: