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Compare fixed and accelerated declining balances

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Step-by-step guide · read-only · Selected E2

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Data & tools
Task requirements

Enter separate formulas in E2:E5. B2:B5 are cost, salvage, whole useful years and selected year. B6 is the DDB factor; B7 is the number of months in the first fiscal year. E2 is DB for the selected year using B7. E3 is the DDB charge for that whole year using B6; DDB has no month argument. E4 is cost less all DB charges through B5. E5 is the additional DB charge at period life+1 when the first year has fewer than 12 months, otherwise numeric zero. Do not force the DB ending balance to equal salvage.

Edit an allocation input

Apply a numeric literal to the current worksheet. Cost and salvage use cents; years, fiscal months and elapsed-year boundaries use the units shown below. The complete input relationships are checked before a value is applied.

Applied value: 15750

Follow the highlighted cells. Switch to Your turn to edit. Answer cells: E2, E3, E4, E5. Browser calculations may differ from your Excel version.

Selection & formula search

Practice stays on this device. No worksheet data is uploaded.

Notes & examples
About this lesson
Asset depreciation18 min·Growing

Keep DB rate rounding, first-year months, DDB factors and the final fiscal stub explicit.

THE QUICK ANSWER01

Keep DB rate rounding, first-year months, DDB factors and the final fiscal stub explicit.

E2=DB($B$2,$B$3,$B$4,$B$5,$B$7)
E3=DDB($B$2,$B$3,$B$4,$B$5,$B$6)
E4=$B$2-SUM(DB($B$2,$B$3,$B$4,SEQUENCE($B$5),$B$7))
E5=IF($B$7=12,0,DB($B$2,$B$3,$B$4,$B$4+1,$B$7))
For the example data
E2 2680.5091083750003E3 2295.918367346939E4 7284.208766625E5 279.7526289242256

Enter each formula in its labeled answer cell. These report formulas perform different jobs; do not fill the first formula down.

UNDERSTAND THE IDEA

How it works

First-year months change the fiscal profile

For a six-month first year, DB weights its first charge by one half and the last additional fiscal charge by one half. Intermediate years use the remaining book balance and the rounded fixed rate.

The methods have different boundaries

DDB caps a large charge at salvage. A low factor can leave a residual above salvage after the stated life. DB uses a rounded rate and can leave a different residual; the task does not impose a separate salvage adjustment.

Keep the declared numeric model

Cost is numeric cents from 1 through 1,000,000; salvage is numeric cents from zero through cost. Useful life is a whole 1–20 years. A selected year is a whole 1–life. A declining factor is 0.5–3. First-year months are whole 1–12. Window endpoints satisfy 0 <= start <= end <= life. Text, blank, Boolean and genuine error inputs cannot stand in for these numbers. Calculated amounts retain full precision.

Read the full step-by-step walkthrough
  1. Read the two separate controls

    The DDB factor changes its declining rate. First fiscal-year months belongs to DB; applying that same stub proportion to DDB would define a different task.

  2. Respect the rounded DB rate

    DB derives a rate from the salvage/cost ratio and useful life, then rounds that rate to three decimal places. Its first period is weighted by B7/12.

  3. Cap a DDB charge at the remaining base

    DDB applies factor/life to the opening carrying value, with a cap at the amount still available above salvage. It does not automatically switch to straight line.

  4. Accumulate DB charges from year one

    Calculate each DB period through B5, including the first-year fraction, then subtract the sum from original cost. Keep the rate and charges unrounded after DB has applied its own rate rule.

  5. Handle the remaining fiscal stub

    A shortened first fiscal year leaves a final stub at period life+1. For a full first year report zero without asking DB for an extra period.

  6. Do not silently repair a residual

    DB rate rounding and an unswitched DDB method can leave a terminal carrying value different from salvage. Report the defined method rather than forcing an equality.

WHEN SOMETHING LOOKS OFF

Things to watch

Dropping the month argument

The first fiscal year can contain fewer than twelve months. Omitting B7 changes DB charges and the carrying-value rollforward.

Rounding the DB rate to a percent

DB rounds the decimal rate to three places, not to a whole percentage point.

Assuming DDB switches to straight line

DDB keeps its declining method. Use an explicitly switching VDB calculation when that is the model you intend.

About this example

Original bounded source cases checked with real Univer formulas and independent annual recurrences/overlap arithmetic. The VDB switching-window task explicitly uses cumulative zero-origin differences; it does not certify direct fractional-start equivalence or native clients.

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Content version 1. Practice checks compare calculated results across different datasets; they do not certify every possible formula.

Reference material