|
|
Double Declining Balance Method Of Depreciation |
|
|
|
 Home Site Map Add Term Search About Us Contributors |
Double Declining Balance Method Of DepreciationA use of the declining balance method, but with double the depreciation allowable by straight line. An accelerated method.Double Declining Balance Method Of Depreciation 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. Double declining balance depreciation method (DDB)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. Book DepreciationBook DepreciationDepreciation reserved (on the books) by an owner for future replacement or retirement of an asset. DepreciationDepreciation1. A fall in the value of a country's currency on the exchange market, relative either to a particular other currency or to a weighted average of other currencies. The currency is said to depreciate. Opposite of "appreciation." 2. The decline in value or usefulness of a piece of capital over time, and/or with use. Earnings before interest, taxes, depreciation, and amortization (EBITDA)Earnings before interest, taxes, depreciation, and amortization (EBITDA)A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of interest and income taxes. Depreciation and amortization expenses are not included in the costs. Further SuggestionsCurrency depreciationRecapture Of Depreciation Straight line depreciation Depreciation tax shield Earnings before interest, taxes, and depreciation (EBITD) Double declining balance depreciation Declining Balance Method Of Depreciation Capital appreciation or depreciation Depreciation Asset Depreciation Range System Accrued Depreciation Currency depreciation Capital depreciation Sum of the years digits depreciation Real appreciation or depreciation |
|
|
|