EXCEL VDB FUNCTION

The Excel VDB function computes a stock’s depreciation over time using the Double Declining Balance Method or another given depreciation rate (including partial periods).

Syntax :

=VDB( cost, salvage, life, start_period, end_period, [factor], [no_switch] )

Parameters :

  • cost – The asset’s initial purchase price.

  • Salvage – The asset’s worth at the conclusion of depreciation.

  • life -The number of periods over which an asset will be depreciated.

  • start period – The starting period for which the depreciation should be calculated.

  • end period – The period at the end of which you wish to compute depreciation.

  • [factor] – An optional parameter for specifying the rate of depreciation.
    If the function’s [factor] argument is missing, the default value of 2 (specifying the double declining depreciation technique) is used.
  • [no switch] – When depreciation exceeds the decreasing balance calculation, an optional logical argument determines whether the technique should switch to straight line depreciation. Possible values include:

– TRUE – Do NOT use the straight-line depreciation technique when depreciation exceeds the falling balance calculation;

– FALSE – DO use the straight-line depreciation method when depreciation exceeds the decreasing balance calculation.
If the [no switch] option is missing, the default value is FALSE.

Step By Step Guide of VDB Function

Example :

The VDB function in the spreadsheet on the right utilises the double declining depreciation technique to compute the depreciation over different time periods of an asset that costs $10,000 at the start of year 1 and has a salvage value of $1,000 after 5 years.

Because the total of the depreciations from years 1, 2, and 3 adds up to $9,000, the asset value at the end of year 5 is $10,000 – $9,000 = $1,000.

which, as predicted, is the given salvage value.

Also, because the [factor] and [no switch] parameters are missing in the examples, their default values are 2 and FALSE, respectively.

VDB Function
  • #NUM! –

    If any of the following conditions is encountered:

    The specified cost, salvage, start period, end period, or [factor] parameters are all 0; the supplied life argument is also 0;
    The specified start period is greater than the supplied end period; start period > life or end period > life

  • #VALUE! – This error occurs if any of the supplied parameters is not a number.

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