# Declining Balance Depreciation Calculator

There are various methods used to calculate the depreciation expense one of which is the declining balance depreciation method. This calculator will perform the declining balance depreciation calculation for you, and work out the annual depreciation expense and the depreciation rate.

The calculation is carried out using the declining balance depreciation formula which, each year, takes the net book value of the asset and multiples it by declining balance depreciation rate. The net book value is the cost of the asset less the accumulated depreciation to date.

Using this calculated declining balance rate, the asset will automatically be written down to its salvage value at the end of its useful life, at which point the depreciation expense is stopped.

The formula for declining balance depreciation is given as follows:

Declining balance depreciation = Net book value x Declining balance depreciation rate

and the formula for the declining balance depreciation rate is given by

Declining balance depreciation rate = 1 – Useful life √ Salvage value / Cost

Full details of how the declining balance depreciation method is used can be found in our depreciation tutorial. ## Using the Declining Balance Depreciation Calculator

The Excel declining balance depreciation calculator, available for download below, is used to compute declining balance depreciation by entering details relating to the asset. The calculator is used as follows:

1. Enter the cost of the asset. The cost of the asset can be found in the long term asset account, asset register, or on the original source document (invoice) for the asset
2. Enter the salvage value. The salvage or residual value is the amount the asset is expected to be worth at the end of its useful life.
3. Enter the useful life. The useful life is the anticipated time in years which the asset is expected to be useful to the business. The declining balance depreciation calculator works out the declining balance depreciation rate. This is the rate which will write the asset down to its salvage value over its useful life.
4. Enter the year. Enter the year for which the depreciation expense is required.
For example, if the depreciation is required for year fifteen of the assets life, enter the number 15. The declining balance depreciation calculator works out the depreciation expense for that year.