The DB function calculates the depreciation of an asset for a specified period by using the fixed-declining balance method.

DB takes 5 required arguments and no optional arguments:

Syntax: DB(cost, salvage, life, period, month)

#1)
Using the DB function:
#2)
The arguments for the DB function are:
Argument Required? Description
cost Required The initial cost of the asset.
salvage Required The value at the end of the depreciation (the salvage value of the asset). This value can be 0.
life Required The number of periods over which the asset is being depreciated (the useful life of the asset).
period Required The period for which you want to calculate the depreciation. Period must use the same units as life.
month Required The number of months in the first year. If month is omitted, it is assumed to be 12.
#3)
Under the hood:
The fixed-declining balance method computes depreciation at a fixed rate. DB uses the following formulas to calculate depreciation for a period:
(cost - total depreciation from prior periods) * rate
where:
rate = 1 - ((salvage / cost) ^ (1 / life)), rounded to three decimal places


Depreciation for the first and last periods is a special case. For the first period, DB uses this formula:
cost * rate * month / 12


For the last period, DB uses this formula:
((cost - total depreciation from prior periods) * rate * (12 - month)) / 12

Summary

The DB function calculates the depreciation of an asset for a specified period by using the fixed-declining balance method.
comments powered by Disqus