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In this lesson we will take a look at DB, which stands for Declining Balance, and uses a fixed rate to calculate the Depreciation Values.
To find it we’ll enter the same values as in SYD.
We’ll write Equals, DB, select the Cost, Residual Value and Lifespan, making them all absolute, as well as selecting the period to the left.
DB also has an optional fifth argument which lets you decide how many months to go in the first year.
The default is 12, but you can set this argument to 6, for example, if you purchased the asset at the beginning of the third quarter in the first year.
We will ignore it for now, and copy downward.
By the tenth period, the Asset value has depreciated to Fourteen hundred, Ninety Three, which is just under the Residual value.
We’ll insert a graph to assess the curvature of the line.
In this lesson we have gone through the Depreciation function DB.