Excel DB and DDB Functions
last modified April 4, 2025
The DB and DDB functions are Excel's depreciation
functions used in financial calculations. DB calculates fixed-
declining balance depreciation, while DDB calculates double-
declining balance depreciation. This tutorial provides a comprehensive guide
to using these functions with detailed examples.
DB/DDB Function Basics
Depreciation functions calculate the decrease in value of an asset over time.
DB uses a fixed rate, while DDB uses an accelerated
method. Both are essential for financial modeling and accounting.
| Function | Description | Syntax |
|---|---|---|
| DB | Fixed-declining balance depreciation | =DB(cost, salvage, life, period, [month]) |
| DDB | Double-declining balance depreciation | =DDB(cost, salvage, life, period, [factor]) |
This table compares the two depreciation functions. Both require cost, salvage value, useful life, and period arguments. DB has an optional month parameter, while DDB has an optional factor.
Basic DB Function Example
This example demonstrates the simplest use of the DB function to calculate depreciation for an asset with a 5-year life.
=DB(10000, 1000, 5, 1)
This formula calculates first year depreciation for a $10,000 asset with $1,000 salvage value over 5 years. The result is $3,690.00. DB automatically calculates the fixed rate based on the inputs.
DB Function with Partial First Year
The DB function's optional month parameter handles assets purchased mid-year. This example shows depreciation for an asset bought in month 4.
| A | B |
|---|---|
| Cost | 15000 |
| Salvage | 2000 |
| Life | 6 |
| Period | 1 |
| Month | 4 |
| Depreciation | =DB(B1, B2, B3, B4, B5) |
The table shows inputs for an asset purchased in April (month 4). The DB function adjusts first year depreciation to account for the partial year.
=DB(15000, 2000, 6, 1, 4)
This formula calculates first year depreciation for 9 months (April-December). The result is $2,835.00. Subsequent years will use full 12-month periods.
Basic DDB Function Example
This example demonstrates the DDB function's accelerated depreciation method. It uses double the straight-line rate by default.
=DDB(8000, 500, 5, 3)
This formula calculates third year depreciation for an $8,000 asset with $500 salvage value over 5 years. The result is $1,152.00. DDB front-loads depreciation compared to DB.
DDB with Custom Factor
The DDB function's optional factor parameter lets you specify the depreciation rate. This example uses 1.5 instead of the default 2.
| A | B |
|---|---|
| Cost | 12000 |
| Salvage | 1500 |
| Life | 4 |
| Period | 2 |
| Factor | 1.5 |
| Depreciation | =DDB(B1, B2, B3, B4, B5) |
The table shows inputs for a 1.5x declining balance method. This produces less accelerated depreciation than the standard 2x DDB method.
=DDB(12000, 1500, 4, 2, 1.5)
This formula calculates second year depreciation using a 1.5 factor instead of 2. The result is $3,375.00. Custom factors provide flexibility in depreciation schedules.
Comparing DB and DDB Methods
This example compares depreciation amounts between DB and DDB methods for the same asset across its useful life.
| Year | DB | DDB |
|---|---|---|
| 1 | =DB(20000,2000,5,1) | =DDB(20000,2000,5,1) |
| 2 | =DB(20000,2000,5,2) | =DDB(20000,2000,5,2) |
| 3 | =DB(20000,2000,5,3) | =DDB(20000,2000,5,3) |
| 4 | =DB(20000,2000,5,4) | =DDB(20000,2000,5,4) |
| 5 | =DB(20000,2000,5,5) | =DDB(20000,2000,5,5) |
The table shows side-by-side depreciation calculations for both methods. DB produces a smoother curve while DDB shows higher early-year depreciation.
The DB and DDB functions provide powerful tools for
financial analysis. DB offers consistent depreciation, while DDB accelerates
expenses. Choose based on your accounting needs and tax strategy. Remember
that both methods will depreciate down to (but not below) the salvage value.
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