DDB

• How to use DDB formula?
• Examples of using DDB formula
• DDB formula not working?
• Similar formulas to DDB

Usage

Use the DDB formula with the syntax shown below, it has 4 required parameters and 1 optional parameter:

=DDB(cost, salvage, life, period, [factor])

1. cost (required):
   The initial cost of the asset.
2. salvage (required):
   The value of the asset at the end of its useful life.
3. life (required):
   The number of periods over which the asset is depreciated.
4. period (required):
   The period for which depreciation is being calculated.
5. factor (optional):
   The rate at which the balance declines. If omitted, a value of 2 is used.

Examples

Calculating Asset Depreciation

One of the most common uses of the DDB function is to calculate the depreciation of an asset over time. By using the formula with different inputs for each period, a table of depreciation values can be created.

Projecting Asset Value

The DDB function can also be used to project the future value of an asset. By using the formula with different periods, an estimate of the asset's value at a future point in time can be calculated.

Comparing Depreciation Methods

The DDB function can be used in conjunction with other depreciation methods to compare the total depreciation over time for an asset. This can help in making decisions about which depreciation method to use for a particular asset.

Common Mistakes

Incorrect order of arguments

One common mistake is to enter the arguments in the wrong order, which can result in incorrect calculations. Double-check the order of the arguments and make sure they match the formula syntax.

Using incorrect data types

Make sure that the data types of the arguments are correct. For example, entering text instead of numbers can cause errors in the calculation.

Not accounting for the factor

The optional factor argument can affect the calculation of the depreciation, so make sure to include it if needed. If not needed, leave the argument blank or enter 0.

Related Formulas

The following functions are similar to DDB or are often used with it in a formula:

• SLN

  The SLN function calculates the depreciation of an asset for a single period using the straight-line method. This method assumes that the asset loses an equal amount of value each year over its useful life. The function takes three arguments: the initial cost of the asset, its salvage value at the end of its useful life, and the total number of periods of its useful life.

• SYD

  The SYD function returns the sum-of-years' digits depreciation of an asset for a specified period. It is commonly used in accounting to calculate the depreciation expense of an asset over its useful life. The function calculates the depreciation for a specific period using the sum-of-years' digits method. This method assumes that the asset's useful life will decline more quickly in the early years of its life and slow down over time.

• PPMT

  The PPMT function calculates the payment on the principal of an investment or loan given the interest rate, number of periods, and present value. It is commonly used in financial analysis to calculate the principal portion of a loan or investment payment. The function returns a negative number because it represents a payment toward the principal balance, which reduces the overall balance.

• IPMT

  The IPMT function calculates the interest payment for a given period of an investment or loan. It is commonly used to determine the interest portion of a loan payment. This function can be helpful when creating loan amortization schedules or when analyzing the cost of borrowing money.

Learn More

You can learn more about the DDB Google Sheets function on Google Support.