How to Calculate Declining-Balance Depreciation with DB in Excel

Depreciate restaurant kitchen equipment faster in its early years, including a partial first year bought mid-year.

You will learn to

• Calculate first-year fixed-declining depreciation
• Handle an asset bought part-way through the year
• Find book value after two years

How it works

DB(cost, salvage, life, period, [month]) uses the fixed-declining balance method: each year’s depreciation is a fixed rate times the book value left at the start of the year, so early years get the biggest charges. Excel works out the rate from cost, salvage and life.

The optional month argument is the number of months the asset was owned in the first year. If equipment is bought in April, use 9 so year 1 only gets 9/12 of a full charge — the remainder spills into an extra final period.

=DB(B2,B3,B4,1,B5)