Answer first
What this calculator tells you
Calculate depreciation, book value and accumulated depreciation for any year under the double-declining-balance method. Front-load deductions for an asset that loses value fastest in its early years. Formula: Yearly depreciation = book value at start of year × (2 ÷ useful life), never taking book value below salvage value. At the worked-example inputs, the depreciation in that year is $12,000. Holding every other input steady, moving purchase cost from $40,000 to $60,000 moves the result from $9,600 to $14,400.
Transparent method
The formula
Front-load deductions for an asset that loses value fastest in its early years.
Worked example
Example inputs
How to interpret the result
Double-declining balance applies twice the straight-line rate to the remaining book value, so the first years carry the largest charge. On a $50,000 asset over five years the rate is 40 percent, giving $20,000 in year one and $12,000 in year two. The method stops when book value reaches salvage, so the last years shrink or vanish. The full schedule on the $50,000 example runs $20,000, $12,000, $7,200, $4,320 and $1,480 across the five years, with book value falling to $30,000, $18,000, $10,800, $6,480 and $5,000. The last year is capped so book value stops at salvage.
At the worked-example inputs the depreciation in that year is $12,000. It rises with purchase cost and falls as year to calculate and useful life increase; salvage value does not move it.
These are planning metrics, not audited accounting or a valuation opinion.
Before you rely on it
What to check
Look at the book value column against salvage. Once they meet, later years show zero, and that is the method working, not an error.
The common error
Where people go wrong with double declining balance depreciation calculator
Applying the rate to the original cost each year. The rate acts on the shrinking book value, and using the cost repeats year one's charge and overshoots the asset's whole value.
Sensitivity evidence
How purchase cost changes the depreciation in that year
Holding every other input at the worked-example value, moving purchase cost from $40,000 to $60,000 moves the depreciation in that year from $9,600 to $14,400: a spread of $4,800, or 40% of the worked-example result.
| Purchase cost | Depreciation in that year | Book value at year end | Total depreciation so far |
|---|---|---|---|
| $40,000 | $9,600 | $14,400 | $25,600 |
| $45,000 | $10,800 | $16,200 | $28,800 |
| $50,000worked example | $12,000 | $18,000 | $32,000 |
| $55,000 | $13,200 | $19,800 | $35,200 |
| $60,000 | $14,400 | $21,600 | $38,400 |
Every input, tested
Which input moves the depreciation in that year most
Of the 4 inputs, year to calculate moves the depreciation in that year most ($12,800 across the range tested) and useful life moves it least ($1,389). Salvage value does not change it at all.
| Input | Tested from | To | Depreciation in that year at each end | Swing |
|---|---|---|---|---|
| Year to calculate | 1 | 3 | $20,000 to $7,200 | $12,800 (107%) |
| Purchase cost | $45,000 | $55,000 | $10,800 to $13,200 | $2,400 (20%) |
| Useful life | 4.0 years | 6.0 years | $12,500 to $11,111 | $1,389 (12%) |
| Salvage value | $4,500 | $5,500 | $12,000 to $12,000 | none |
Two variables at once
Depreciation in that year by purchase cost and useful life
Across the grid the depreciation in that year runs from $8,163 to $14,400. Moving purchase cost from $40,000 to $60,000 shifts it by $4,800 at the middle column, and moving useful life from 3.0 years to 7.0 years shifts it by $907 at the middle row, so purchase cost is the bigger lever here.
| Purchase cost \ Useful life | 3.0 years | 5.0 years | 7.0 years |
|---|---|---|---|
| $40,000 | $8,333 | $9,600 | $8,163 |
| $45,000 | $10,000 | $10,800 | $9,184 |
| $50,000 | $11,111 | $12,000 | $10,204 |
| $55,000 | $12,222 | $13,200 | $11,224 |
| $60,000 | $13,333 | $14,400 | $12,245 |
The highlighted cell is the worked example: $12,000.
Step by step
The worked example, input by input
| Input | Value used | What it means |
|---|---|---|
| Purchase cost | $50,000 | Enter the purchase cost used in this calculation. |
| Salvage value | $5,000 | The floor the book value is not allowed to fall below. |
| Useful life | 5.0 years | How many years the asset is expected to be in service. |
| Year to calculate | 2 | Which year of the asset's life to show, counted from 1. |
| Depreciation in that year | $12,000 | |
| Book value at year end | $18,000 | |
| Total depreciation so far | $32,000 | |
Inputs, definitions and assumptions
Purchase cost
Enter the purchase cost used in this calculation. The prefilled worked-example value is $50,000.
Salvage value
The floor the book value is not allowed to fall below. The prefilled worked-example value is $5,000.
Useful life
How many years the asset is expected to be in service. The prefilled worked-example value is 5.0 years.
Year to calculate
Which year of the asset's life to show, counted from 1. The prefilled worked-example value is 2.
How to use this calculator
- 1Verify the inputs. Gather purchase cost, salvage value, useful life and year to calculate from your own documents; the prefilled values are examples.
- 2Save a baseline. The worked example puts the depreciation in that year at $12,000. Store your own version of it as Scenario A.
- 3Test one change. Start with year to calculate, the input with the biggest effect here: moving year to calculate from 1 to 3 takes the depreciation in that year from $20,000 to $7,200, a swing of 107% of the worked-example figure.
- 4Check the extremes. At half the example year to calculate (1) the depreciation in that year is $20,000; at double (4) it is $4,320.
People also ask
Frequently asked questions
How do you calculate double declining balance depreciation?
Yearly depreciation = book value at start of year × (2 ÷ useful life), never taking book value below salvage value. Enter purchase cost in dollars, salvage value in dollars and useful life in years. At the worked-example inputs the depreciation in that year is $12,000.
What does the double declining balance depreciation result mean?
Front-load deductions for an asset that loses value fastest in its early years. At the worked-example inputs the depreciation in that year is $12,000. It rises with purchase cost and falls as year to calculate and useful life increase; salvage value does not move it.
How much does purchase cost change the depreciation in that year?
Holding every other input at the worked-example value, moving purchase cost from $40,000 to $60,000 moves the depreciation in that year from $9,600 to $14,400, a spread of $4,800.
What are the limits of this double declining balance depreciation calculator?
These are planning metrics, not audited accounting or a valuation opinion. The tables on this page test purchase cost only from $40,000 to $60,000; a value outside that range is not tabulated here.
Which input moves the depreciation in that year most in the double declining balance depreciation calculator?
Ranked by how far each moves the depreciation in that year across the range tested: year to calculate ($12,800, 107%), purchase cost ($2,400, 20%) and useful life ($1,389, 12%). Salvage value does not change it.
If I double year to calculate in the double declining balance depreciation calculator, does the depreciation in that year double?
Doubling it from 2 to 4 takes the depreciation in that year from $12,000 to $4,320, which is 0.36 times the worked-example figure. So it falls instead of rising. Halving it to 1 gives $20,000.
How much does salvage value matter in the double declining balance depreciation calculator?
The worked example uses $5,000. Moving salvage value from $4,500 to $5,500 does not change the depreciation in that year or any other result on this page.
How much does useful life matter in the double declining balance depreciation calculator?
The worked example uses 5.0 years. With the other inputs left at the worked example, moving useful life from 4.0 years to 6.0 years takes the depreciation in that year from $12,500 to $11,111, a swing of 12% of the worked-example figure.
How much does year to calculate matter in the double declining balance depreciation calculator?
The worked example uses 2. Holding every other input at its worked-example value, moving year to calculate from 1 to 3 takes the depreciation in that year from $20,000 to $7,200, a swing of 107% of the worked-example figure.
Which inputs change the book value at year end in the double declining balance depreciation calculator?
At the worked-example inputs it is $18,000. Purchase cost takes it from $16,200 to $19,800, useful life takes it from $12,500 to $22,222 and year to calculate takes it from $30,000 to $10,800.
Which inputs change the total depreciation so far in the double declining balance depreciation calculator?
At the worked-example inputs it is $32,000. Purchase cost takes it from $28,800 to $35,200, useful life takes it from $37,500 to $27,778 and year to calculate takes it from $20,000 to $39,200.
How do I set a safety stock level?
Pick a service level, measure the variation in daily demand and use the lead time. Higher service levels and longer lead times need more stock, and variation matters most.
Sources and evidence
Free Calculators Online is independent and is not affiliated with or endorsed by the source organizations. Educational estimates only.