Financial FunctionsAdvanced

DB Function

Calculate depreciation using the declining balance method.

Task:

You are analyzing the depreciation of an asset and want to know the depreciation for a specific period. Calculate the depreciation for period 1 in cell B7 using the DB function, given the cost, salvage value, life, and period.

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Variations of DB

0/3

The same formula in the other shapes it takes at work.

  1. DB Function

    Calculate depreciation using the declining balance method.

    CoreAdvanced
  2. DB for an asset bought part-way through the year

    The month argument shortens the first year.

    Advanced
  3. Book value after two years of DB

    Cost minus each year's depreciation so far.

    Advanced

The data in this exercise

This is the grid you start with. Cell references in the task — B6, C2 — point at the row numbers and column letters below.

7 rows × 2 columns1 cell you fill in
AB
1ParameterValue
2Cost24000
3Salvage3000
4Life10
5Period1
6Month12
7DB

Functions used here

What this exercise teachesMay contain the answer

The DB function is useful for accounting and financial analysis, allowing you to determine the depreciation of an asset over time. It has one quirk worth knowing: the rate it derives from cost, salvage and life is rounded to three decimals before any period is worked out. Here 0.187748 becomes 0.188, which is why the first year is exactly 4512 rather than 4505.94. Small, and it compounds across the whole schedule.