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Double declining balance depreciation method (DDB) |
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Double declining balance depreciation method (DDB)An accounting methodology in which depreciation is accelerated to twice the rate of annual depreciation by the straight-line method.Double declining balance depreciation method (DDB) Similar MatchesDepreciationDepreciationThe charge in a company's accounts which reflects the reduction in value of an asset over time as its useable life is exhausted.Depreciation is charged before calculation of profit, on the grounds that the use of capital assets is one of the costs of being in business and one of the contributors to profit.There are two main methods of depreciation:Straight line: the residual (scrap) value of the asset is deducted from its original cost, and the resultant figure is divided by the estimated life of the asset. The result of that is deducted annually over the life of the asset. So an asset that costs £10,000 and that has a residual value of £200 with a useable life of 4 years is depreciated by £2450 per year.Reducing balance: the amount of annual depreciation is a constant proportion of the cost of the asset.Depreciation has no effect on cash flow. It is just an accounting procedure. Recapture Of DepreciationRecapture Of DepreciationTaxing as ordinary income, upon the sale of property, the amount of depreciation taken above straight line depreciation. Sum of the years digits depreciationSum of the years digits depreciationMethod of accelerated depreciation. Declining Balance Method Of DepreciationDeclining Balance Method Of DepreciationDepreciation by a fixed annual percentage of the balance after deducting each yearly depreciation amount. DepreciationDepreciation(1) Decrease in value to real property improve-ments caused by deterioration or obsolescence. (2) A loss in value as an accounting procedure to use as a deduction for income tax purposes. Further SuggestionsCapital appreciation or depreciationStraight line depreciation Earnings before interest, taxes, depreciation, and amortization (EBITDA) Double Declining Balance Method Of Depreciation Capital depreciation Depreciation tax shield Real appreciation or depreciation Currency depreciation Double declining balance depreciation Depreciation Book Depreciation Earnings before interest, taxes, and depreciation (EBITD) Currency depreciation Asset Depreciation Range System Accrued Depreciation |
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