Financial

DDB Function in Excel

Returns the depreciation of an asset using the double-declining balance method.

Syntax

  • =DDB(cost, salvage, life, period, [factor])

Arguments

  • cost (required): Initial cost of asset
  • salvage (required): Value at end of depreciation
  • life (required): Number of periods
  • period (required): Period to calculate depreciation for
  • factor (optional): Rate of decline (default 2)

Examples

  • =DDB(10000, 1000, 5, 1) - First year depreciation - Result: $4,000

Excel DDB function documentation

  • DDB returns depreciation for a specified period using the double-declining balance method (or custom factor).
  • Syntax: =DDB(cost, salvage, life, period, [factor]).
  • Use DDB for aggressive front-loaded depreciation assumptions in capital budgeting models.
  • Downstream valuation is often tested with [NPV](/functions/npv/), [IRR](/functions/irr/), [PV](/functions/pv/), and [Financial functions](/categories/financial/).

DDB arguments and factor behavior

  • cost, salvage, and life define depreciation envelope.
  • period selects the time slice for depreciation output.
  • factor defaults to 2 (double-declining), but can be customized.
  • Higher factors accelerate earlier depreciation and reduce later amounts.

Step-by-step: accelerated depreciation model

  • Step 1 — Define asset assumptions and chosen acceleration factor.
  • Step 2 — List period numbers from 1 through life.
  • Step 3 — Apply =DDB(cost,salvage,life,period,factor) down rows.
  • Step 4 — Compare schedule against [DB](/functions/db/) and straight-line alternatives.
  • Step 5 — Incorporate tax shield timing into discounted cash-flow evaluation.

DDB vs DB vs SLN

  • DDB is typically the most front-loaded among the three.
  • DB is declining-balance but less aggressive depending on assumptions.
  • SLN is flat and easiest for simple reporting.
  • Choice of method shifts timing of taxable income and project cash benefits.

Worked examples to copy

  • Default double-declining period 1: =DDB(80000,8000,8,1).
  • Period 4 with default factor: =DDB(80000,8000,8,4).
  • Custom factor 1.5: =DDB(80000,8000,8,2,1.5).
  • Scenario compare: evaluate resulting after-tax cash flows with [NPV](/functions/npv/).

People also ask

  • Can DDB depreciate below salvage? — Formula respects salvage boundary under standard usage.
  • Why is depreciation very high in period 1? — Double-declining acceleration effect.
  • Should I always use factor 2? — Use policy-compliant factor for your accounting framework.
  • How does this affect investment ranking? — Earlier tax shields can improve [IRR](/functions/irr/) and NPV outcomes.

Common errors

  • period must be between 1 and life

Use cases

  • Accelerated depreciation
  • Tax planning
  • Asset management

Frequently asked questions

  • What is DDB (double-declining balance) depreciation? DDB is accelerated depreciation that's highest in year 1 and decreases each year. It depreciates at 2× the straight-line rate applied to the remaining book value. Good for assets that lose value quickly like computers or vehicles.
  • How does DDB compare to straight-line depreciation? DDB front-loads depreciation: more expense in early years, less later. For a $10,000 asset over 5 years, DDB year 1 = $4,000 vs SLN = $1,800. Total depreciation is the same, but timing differs. DDB can reduce taxes in early years.
  • What is the factor parameter in DDB? Factor controls the depreciation rate multiplier. Default is 2 (double-declining). Use 1.5 for 150% declining balance, or 3 for triple-declining. Higher factors = more aggressive early depreciation.

Editorial review

  • Reviewed by Excel.Directory Editorial Team. Updated May 2026.

When to use DDB

  • Accelerated depreciation — common Financial scenario for DDB.
  • Tax planning — common Financial scenario for DDB.
  • Asset management — common Financial scenario for DDB.

DDB in the Financial category

  • Browse all Financial functions at /categories/financial/ for related formulas.
  • DDB syntax: =DDB(cost, salvage, life, period, [factor])
  • cost (required): Initial cost of asset
  • salvage (required): Value at end of depreciation
  • life (required): Number of periods
  • period (required): Period to calculate depreciation for
  • Confirm DDB arguments match the syntax shown above before filling down.
  • Lock table and range references with $ when copying formulas across rows or sheets.

Formula checklist before you copy down

  • Confirm DDB arguments match the syntax shown above before filling down.
  • Lock table and range references with $ when copying formulas across rows or sheets.
  • If results look wrong, check for text stored as numbers and invisible spaces with TRIM.
  • Spot-check three known input rows manually against expected output.

Related Excel functions

  • SLN (/functions/sln/): Returns the straight-line depreciation of an asset for one period.
  • SYD (/functions/syd/): Returns the sum-of-years' digits depreciation of an asset for a specified period.
  • DB (/functions/db/): Returns the depreciation of an asset using the fixed-declining balance method.

Errors to watch for

  • period must be between 1 and life — review causes on linked error pages in the directory.

Copy-paste audit workflow

  • Enter DDB on three test rows with known expected output documented on a QA tab.
  • Fill down only after absolute references are locked on lookup tables and rate tables.
  • Compare against manual calculation or a calculator for financial and statistical functions.
  • Search this directory for comparison guides when choosing between similar functions in the same category.

DDB worked examples to copy

  • =DDB(10000, 1000, 5, 1) — First year depreciation. Expected result: $4,000.

DDB reference summary for crawlers and offline review

  • DDB belongs to the Financial category in Excel. Returns the depreciation of an asset using the double-declining balance method.
  • Full syntax: =DDB(cost, salvage, life, period, [factor]). Open /functions/ddb/ for parameters, FAQs, and related pages.
  • Common mistakes: period must be between 1 and life
  • Pair this function with comparison guides when another Excel formula might fit the same task better.
  • Review fix-excel-formula-errors when unexpected errors appear after upgrading Excel or sharing across locales.