Declining Balance Depreciation Method

The Declining Balance method is an "accelerated" form of depreciation. It writes off more of the asset's cost in the early years and less in the later years.

The Formula

First, find the Straight Line Rate:

SL Rate = 1 / Useful Life

Then multiply by the acceleration factor (typically 2 for "Double Declining"):

Depreciation Rate = SL Rate × Factor

Finally, calculate expense for the year:

Book Value at Start of Year × Depreciation Rate

Example: Double Declining Balance (DDB)

You buy a laptop for $2,000. Useful life is 5 years.

Straight Line Rate: 1/5 = 20%
DDB Rate: 20% × 2 = 40%

Year

Book Value (Start)

Depreciation (40%)

$2,000

$800

$1,200

$480

$720

$288

When to use it?

Use this method for assets that satisfy one (or both) of these conditions:

Rapid Obsolescence: Tech gadgets (phones, computers) that lose market value quickly.
High Early Utility: Vehicles or machinery that require more maintenance as they age (so you want higher depreciation expense when maintenance is low).

Try our Double Declining Calculator →