Double Declining Balance depreciation is the most accelerated method of depreciation. Using the Double Declining Balance method, an asset depreciates twice the rate of the Straight Line depreciation method rate each year.
To calculate the Double Declining Balance depreciation, the system must first calculate the annual Straight Line depreciation rate.
The system calculates the annualized Straight Line depreciation rate based on the following equation:
1 / Est. Useful Life in Years = Annual Straight Line Depreciation Rate
The system then calculates the Double Declining Balance depreciation expense based on the following equation:
Book value x (2 x Annual Straight Line Depreciation Rate) = Annual Depreciation Expense