A declining balance depreciation schedule is an accounting method that expenses a higher amount of depreciation in the earlier years of an asset’s useful life and a lower amount in the later years. This method is often preferred for assets that lose more of their value upfront or are more productive in their initial years.

The most common form of declining balance depreciation is the double declining balance (DDB) method. This method depreciates assets at twice the straight-line depreciation rate.

Key Terms:

• Cost of Asset: The initial purchase price of the asset.
• Salvage Value: The estimated residual value of the asset at the end of its useful life. This is the amount the asset is expected to be worth when it’s no longer useful to the company.
• Useful Life: The estimated period over which the asset will be productive for the business.
• Book Value: The asset’s cost minus its accumulated depreciation.

Double Declining Balance Formula:

1. Straight-Line Depreciation Rate: (1/Useful Life)×1003. Depreciation Expense for the Year:Beginning Book Value for the Year×Double Declining Balance Rate

Important Note: The asset should not be depreciated below its salvage value. In the final years, the depreciation expense might be adjusted to ensure the book value equals the salvage value at the end of the useful life.

Example Schedule (Double Declining Balance Method):

Let’s assume the following:

• Cost of Asset: $100,000
• Salvage Value: $10,000
• Useful Life: 5 years

Step 1: Calculate the Rates

• Straight-Line Rate = 1/5 years=0.20 or 20* Double Declining Balance Rate =20

Step 2: Create the Schedule

Year	Beginning Book Value	Depreciation Rate	Depreciation Expense	Accumulated Depreciation	Ending Book Value
1	$100,000	40%	$40,000	$40,000	$60,000
2	$60,000	40%	$24,000	$64,000	$36,000
3	$36,000	40%	$14,400	$78,400	$21,600
4	$21,600	40%	$8,640	$87,040	$12,960
5	$12,960	–	$2,960 *	$90,000	$10,000

• Year 5 Adjustment: In Year 5, if we applied the 40% rate to $12,960, the depreciation would be $5,184, resulting in an ending book value of $7,776 ($12,960 – $5,184). However, the asset cannot be depreciated below its salvage value of $10,000. Therefore, the depreciation expense for Year 5 is adjusted to bring the book value down to exactly the salvage value: $12,960 (Beginning Book Value) – $10,000 (Salvage Value) = $2,960.

This schedule shows how more depreciation is recognized in the early years.

If you provide the specific cost, salvage value, and useful life of your asset, I can generate a precise declining balance depreciation schedule for you!