Answers the Question
How much is an item worth, if we assume it loses value very rapidly?
Calculator for Double Declining Depreciation
What Is the Double Declining Depreciation?
A full description can be found in the guide to depreciation
Why Is it Important?
- This method of depreciation allows users to estimate the value of an item and receive a number that is best for tax purposes.
Formula(s) to Calculate Double Declining Depreciation
- DEPRECIATION PERCENTAGE = 1 - (SCRAP VALUE / PURCHASE PRICE) ^ (1 / LIFESPAN IN YEARS)
- Attempting to discover the depreciation rate independently for each year, rather than just once.
- Using rounded, rather than exact numbers. This leads to increasing error as the years progress.