The Excel DDB function returns the depreciation of an asset for a given period using the double-declining balance method or another method you specify by changing the factor argument
Syntax:= DDB (cost, salvage, life, period, [factor])
The DDB function syntax has the following arguments:
- Cost Required. The initial cost of the asset.
- Salvage Required. The value at the end of the depreciation (sometimes called the salvage value of the asset). This value can be 0.
- Life Required. The number of periods over which the asset is being depreciated (sometimes called 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).
Example: Let’s look at some Excel DDB function examples and explore how to use the DDB function as a worksheet function in Microsoft Excel:
Based on the Excel spreadsheet above, the following DDB examples would return:
- The function generates #VALUE! Error if arguments to the function is non – numeric
- The function generates #NUM! Error if:
- The value of cost and salvage is less than 0.
- The value of life of asset is less than or equals to zero.
- The period argument is less than or equals to 0 or greater than life period.
- The factor argument is less than 1.