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Double Declining Balance Method Formula

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Depreciation Expense refers to the allocation of the cost of a tangible asset over its useful life. Check FAQs

DE = ((\frac{PC - SV}{ULA}) \cdot 2) \cdot BBV

DE - Depreciation Expense?PC - Purchase Cost?SV - Salvage Value?ULA - Useful Life Assumption?BBV - Beginning PP&E Book Value?

Double Declining Balance Method Example

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Here is how the Double Declining Balance Method equation looks like with Values.

Here is how the Double Declining Balance Method equation looks like with Units.

Here is how the Double Declining Balance Method equation looks like.

462222.2222 = ((\frac{340000 - 180000}{9}) \cdot 2) \cdot 13

462222.2222 = ((\frac{340000 - 180000}{9}) \cdot 2) \cdot 13

462222.2222 = ((\frac{340000 - 180000}{9}) \cdot 2) \cdot 13

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Double Declining Balance Method Solution

Follow our step by step solution on how to calculate Double Declining Balance Method?

FIRST Step Consider the formula

DE = ((\frac{PC - SV}{ULA}) \cdot 2) \cdot BBV

Next Step Substitute values of Variables

∴

DE = ((\frac{340000 - 180000}{9}) \cdot 2) \cdot 13

Next Step Prepare to Evaluate

∴

DE = ((\frac{340000 - 180000}{9}) \cdot 2) \cdot 13

Next Step Evaluate

∴

DE = 462222.222222222

LAST Step Rounding Answer

∴

DE = 462222.2222

Double Declining Balance Method Formula Elements

Variables

Depreciation Expense

Depreciation Expense refers to the allocation of the cost of a tangible asset over its useful life.

Symbol: DE

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Depreciation Expense

Purchase Cost

Purchase Cost refers to the total amount of money expended by a company or individual to acquire goods or services from a supplier or vendor.

Symbol: PC

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Purchase Cost

Salvage Value

Salvage Value refers to the estimated residual worth of an asset at the end of its useful life.

Symbol: SV

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Salvage Value

Useful Life Assumption

Useful Life Assumption refers to the estimated period over which an asset is expected to provide economic benefits to its owner.

Symbol: ULA

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Useful Life Assumption

Beginning PP&E Book Value

Beginning PP&E Book Value(Property, Plant, and Equipment) refers to the value of tangible assets owned by a company at the start of an accounting period.

Symbol: BBV

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Beginning PP&E Book Value

Other formulas in Capital Budgeting category

Go Payback Period

PBP = \frac{Initial Invt}{C f}

Go Cost of Retained Earnings

C RE = (\frac{D}{P c}) + g

Go Cost of Debt

R d = Int.E \cdot (1 - T r)

Go After-Tax Cost of Debt

ATCD = (R f + CS P) \cdot (1 - T r)

How to Evaluate Double Declining Balance Method?

Double Declining Balance Method evaluator uses Depreciation Expense = (((Purchase Cost-Salvage Value)/Useful Life Assumption)*2)*Beginning PP&E Book Value to evaluate the Depreciation Expense, The Double Declining Balance Method is an accelerated depreciation technique commonly used in accounting to allocate the cost of an asset more heavily in the earlier years of its useful life. Depreciation Expense is denoted by DE symbol.

How to evaluate Double Declining Balance Method using this online evaluator? To use this online evaluator for Double Declining Balance Method, enter Purchase Cost (PC), Salvage Value (SV), Useful Life Assumption (ULA) & Beginning PP&E Book Value (BBV) and hit the calculate button.

FAQs on Double Declining Balance Method

What is the formula to find Double Declining Balance Method?

The formula of Double Declining Balance Method is expressed as Depreciation Expense = (((Purchase Cost-Salvage Value)/Useful Life Assumption)*2)*Beginning PP&E Book Value. Here is an example- 462222.2 = (((340000-180000)/9)*2)*13.

How to calculate Double Declining Balance Method?

With Purchase Cost (PC), Salvage Value (SV), Useful Life Assumption (ULA) & Beginning PP&E Book Value (BBV) we can find Double Declining Balance Method using the formula - Depreciation Expense = (((Purchase Cost-Salvage Value)/Useful Life Assumption)*2)*Beginning PP&E Book Value.

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Double Declining Balance Method Formula

Double Declining Balance Method Example

Double Declining Balance Method Solution

Double Declining Balance Method Formula Elements

Other formulas in Capital Budgeting category

How to Evaluate Double Declining Balance Method?

FAQs on Double Declining Balance Method

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