Depreciable Cost / Useful Life = Depreciation Expense per Year
Double-Declining Balance Rate = 2 x (1 / Useful Life in Years)
If the useful life in years is 8 years then the
rate would be 2 x (1 / 8) or 25%
Book Value x Double-Declining Balance Rate = Depreciation Expense
(Each year's depreciation is calculated using the new book value of the asset)
1st find the sum of the years' digits of an assets useful life. If an asset has a useful life of 6 years the sum of the digits would be:
1+2+3+4+5+6 = 21
21 becomes the denominator of the fractions used to determine the yearly depreciation. The numerator is the years' digits in decreasing order.
6/21, 5/21, 4/21, 3/21, 2/21, 1/21
Depreciable Cost x Year's Fraction = Depreciation Expense
Depreciable Cost / Estimated Units of Production = Depreciation
Expense per Unit
To calculate the years depreciation expense
Depreciation Expense per Unit x Units of Production for the Year = Depreciation Expense
When calculating depreciation for less than one year the time period is usually rounded off to the nearest whole month. If an asset is held till the 15th or longer the month is counted.
Ex.: An asset is owned till July 10th 6/12 of a years depreciation is used. July is not counted.
Ex: An asset is owned till September 21 9/12 of a years depreciation is used. September is counted.