Had a client request adding additional depreciation methods, specifically Double Declining Balance.
What’s nice about this method, it more accurately reflects that more of an assets value is lost in it’s first year of service than during it’s last year of service. This then would provide more accurate lifecycle cost analysis data in determining the optimum replacement point, particularly among vehicles who have lower/higher depreciation speeds.
We have the ability to use Double-declining balance (see the info below) within RTA Reporting. Could this be helpful for those who need the functionality now?
Description Returns the depreciation of an asset for a specified period using the double-declining balance method or some other method you specify. Cost is the initial cost of the asset. Salvage is the value at the end of the depreciation (sometimes called the salvage value of the asset). Life is the number of periods over which the asset is being depreciated (sometimes called the useful life of the asset). Period is the period for which you want to calculate the depreciation. Period must use the same units as life. Factor is the rate at which the balance declines. If factor is omitted, it is assumed to be 2 (the double-declining balance method).
Note: All five arguments must be positive numbers.
Remark The double-declining balance method computes depreciation at an accelerated rate. Depreciation is highest in the first period and decreases in successive periods. Ddb uses the following formula to calculate depreciation for a period: ((cost-salvage) - total depreciation from prior periods) * (factor/life). Change factor if you do not want to use the double-declining balance method. Use the Vdb function if you want to switch to the straight-line depreciation method when depreciation is greater than the declining balance calculation.
Example Data Assumptions: Initial cost=2400 (A2); Salvage value=300 (A3); Lifetime in years=10 (A4).
Ex. Ddb([A2],[A3],[A4]*365,1) - First day's depreciation.
Ex. Ddb([A2],[A3],[A4]*12,1,2) - First month's depreciation (40.00).
Ex. Ddb([A2],[A3],[A4],1,2) - First year's depreciation (480.00).
Ex. Ddb([A2],[A3],[A4],10) - Tenth year's depreciation.
Note: The results are rounded to two decimal places.