Easy Explanation Notes with Examples

DDB function in Excel

Use

The DDB function (a Financial function) calculates depreciation of an asset by using the Double Declining (DDB) Method or another method specified by the user.

Syntax

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

The DDB function has the following arguments:

cost – Required. The cost to purchase or the initial cost of an asset.

salvage – Required. The remaining useful life the asset, when it is fully depreciated.

life – Required. The useful life of the asset.

period – Required. The period for which you want to calculate the depreciation.

[factor] – Optional. The rate of depreciation, if omitted, Excel will take 2 value as default. Which denotes the double declining method.

Example

Suppose, you purchase a car for $50,000/-, which will be depreciated over five years and it would have the salvage value of $5,000/- when it will be five years old. By using the DDB function, the depreciation for the first year will be:

Result:

The depreciation for the 1st year is $20,000/-, in a similar way, the depreciation for the remaining years will be calculated:

Similar Functions

DB function calculates depreciation of an asset by using the fixed-declining balance method over the useful life of the asset.

SLN function uses the straight-line depreciation method to find out the depreciation of an asset for one period.

SYD function is a Financial function, which returns the sum-of-years’ digits depreciation of an asset for a specific period.

VDB function calculates the depreciation of an asset, for a specified given period, by using any selected depreciation method, such as the double declining balance method etc.

AMORLINC function calculates depreciation of an asset, on a prorated basis, for a specified accounting period.

AMORDEGRC Function returns the depreciation of an asset for each accounting period till a useful life of an asset.

Function Errors

Errors Occur if
#NUM! The supplied cost or salvage <0.
The supplied life, period or [factor] ≤ 0.
The supplied [month]  ≤ 0 or > 12.
The supplied period > life.
#VALUE! The supplied arguments are non-numeric.




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