Double Declining Balance Depreciation Method

This video explains the double-declining-balance depreciation method and illustrates how to calculate depreciation expense using the double-declining-balance method with an example.
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I’ve spent hours trying to look for the way to solve accumulated depreciation and no articles online show how!! They only show how to find the expense. Thank you soooo much!!!

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Your explanation was awesome! I love how you made it possible for me to pull it all together. Thank you for this tutorial.

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[@MyFinancialFocus]

Super interesting. I love how creative the accounting can get with depreciation.

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[@djwhitt7]

Thank you! This helped more than my text book. I wasn't sure what to do if after the calculated years ended with more than the salvage value, so glad you explained that.

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+Debbie Jean Whittington I'm glad the video helped! Some textbooks only serve to increase confusion :)

[@marielsupenia4871]

Thank you for explaining the Double Declining method. Your video was very easy to understand and helpful.

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Perfect great! now i fully understand about Sum of the Year Digit. Thanks professor!

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[@missige]

How did you determine the capped value of 2,480?

[@davidc7660]

Isn't Straight line formula (50,000-4,000)/5?

[@gracegirl14]

+David C I noticed that too.

[@alijalali2276]

+David C He said never mind the SV for now, and plus it does not change the %. and as he mentioned it does not have to be exact the double of straight line! it could be triple!

[@GotWhaleTale]

+gracegirl14 lol didn't bother to listen at all he said ignore the sv because if you do you assume it to be zero and there for he is right 50k/5yr, he is teaching hence why he is keeping it as simple as he can

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+David C Yup that's what I know

[@Jacob-ry3lu]

You're right. Declining balance method ignores salvage value in the initial calculation and then adjusts the last depreciation calculation to bring the book value equal to salvage value.

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[@sjoerdjansen]

It is possible to calculate the Double declining rate much faster and easier though! Instead of first calculating the Single declining rate and double that, you can also devide 1 / by useful life x 2. (the 1 meaning 100% and the uselife life measured in years) In your example you would get (1/ 5) x 2 x 50.000 = 20.000 which is easily typed in your calculator at once:) Thanks for your explanation though!!!

[@kamranohri5074]

On January 1, 2015, Hydri Construction acquired a small excavator for $.85,000. This device had a 4-year service life. It is expected that the equipment will be sold for $.10,000 salvage value at the end of 4 years. The company uses the double-declining balance depreciation method required; Prepare a schedule showing annual depreciation expense, accumulated depreciation

[@hodanhayaan121]

thanks mudane

[@mindsaglowin]

Well and good from an annual period standpoint, but most companies produce monthly or quarterly financials, for both internal and external users. How is the DDB calculation done for interim accounting periods, like monthly? I worked the table, using 60 (5 x 12) for the accounting periods, and the result was quite different.

[@pleasecaparzo]

Assuming we would have Salvage value of (0), can we apply the IRR formula and substracting the rate out of the begining value of each year ?

[@KickWins01]

God bless 🙌

[@priyankamane5581]

When rate of depreciation is given in the question for double declining method so whether to use it or calculate as you calculate

[@jgb5699]

perfect vid

[@suelviadomingos5411]

I have a quick question, I saw online that DDB is also known as Reducing balance method, which is the same as Diminishing balance method, is this true or was I mistaken?

[@collegeguy799]

yes

[@koldkutz7357]

Hi! Thank u this vid rlly helped me a lot. was wondering what if the book value was actually HIGHER than the estimated salvage value? Do we do the same process or we leave it alone. Thanks! Appreciate a reply..thanks

[@Nisa-ch3bp]

Can i ask if a question state expenses ,do the beg bv just use cost or use coa,which is cost price + other expenses

[@VallenciaLisa]

thanks for ur explain ... very helpful ... :)

[@Edspira]

+Vallencia Lisa Sure thing! Best wishes :)

[@defrte]

So of the straight line, double declining and sum of the year digits, double declining balance is the only one where you update the cost every 12 months?

[@brandonwalker2777]

how do you do this on a vehicle that has an interest rate that is steep. Do you add that into the original cost?

[@MyWifesSon69]

This video really helped. My teacher does a really bad job at explaining

[@MyWifesSon69]

Literally the entire class has problems with doing any method

[@gemedahajihajikebeto349]

This good

[@RandySinurat]

Thank you for the tutorial, sir. What if the depreciation is monthly based instead of yearly depreciation?

[@Jacob-ry3lu]

Just always divide by the useful life in terms of reporting periods. If the useful life is two years but reported on a monthly basis, that's 24 reporting periods. If reported on a yearly basis it's just 2 periods.

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I wish this guy was my professor since mine doesn’t know how to teach

[@Edspira]

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[@jacyjohnson1647]

Doesn't salvage value need to be included in straight-line first calculation??

[@shaheryarhameed5442]

Simple question how will you find the double decline, when depreciation value of asset is given????

[@ethiamiehills6615]

Well explained sir, but could you please help me understand on how you're getting Deprecation expense for the last year, that's the only part I want to know

[@firnanofitriyana7315]

thx