The DDB function calculates the depreciation of an asset for a specified period by using the double-declining balance method or some other method that you specify.

DDB takes 4 required arguments and 1 optional argument:

Syntax: DDB(cost, salvage, life, period, [factor])

#1)
Using the DDB function:
#2)
The arguments for the DDB 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.
factor Optional The rate at which the balance declines. If factor is omitted, it is assumed to be 2 (the double-declining balance method).
#3)
Under the hood:
The double-declining balance method computes depreciation at an accelerated rate. Depreciation is highest in the first period and decreases in successive periods. DDB uses the following formula to calculate depreciation for a period:
Min( (cost - total depreciation from prior periods) * (factor/life), (cost - salvage - total depreciation from prior periods) )
Change factor if you do not want to use the double-declining balance method.
Use the VDB function if you want to switch to the straight-line depreciation method when depreciation is greater than the declining balance calculation.

Summary

The DDB function calculates the depreciation of an asset for a specified period by using the double-declining balance method or some other method that you specify.
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