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EXCEL DDB FUNCTION
Excel DDB Function Introduction
The Excel DDB function computes an asset’s depreciation using the Double Declining Balance Method or another depreciation rate supplied.
Description of Excel DDB Function
Syntax :
= DDB (cost, salvage, life, period, [factor])
Parameters :
- The arguments are :
Cost :
- The asset’s initial purchase price.
Salvage :
- The asset’s worth at the end of its useful life. The number of periods during which the asset will be depreciated is referred to as its life.
Period :
- The time period for which you wish to compute depreciation.
Factor :
- An optional input for specifying the rate of depreciation.
- If the function’s [factor] parameter is missing, the default value of 2 is used (denoting the double declining depreciation method).
Step By Step Guide of DDB Function
Example :
In the following example, the DDB function calculates the yearly depreciation of an asset that costs $10,000 at the start of year 1 and has a salvage value of $1,000 after 5 years using the double declining depreciation technique.
Key Points
- #NUM! – Occurs if any of the following conditions are met: the supplied cost or salvage is 0; any of the supplied life, period, or [factor] arguments is 0; the supplied period > life.
- #VALUE! – This error occurs if any of the supplied parameters is not a number.
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