Difference between revisions of "Documentation/How Tos/Calc: DB function"

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== DB ==
 
== DB ==
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Returns the depreciation of an asset for a given year using the declining-balance method.
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Returns the depreciation of an asset for a given year using the fixed rate declining-balance method.
  
 
=== Syntax: ===
 
=== Syntax: ===
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: To calculate depreciation, <tt>'''DB'''</tt> uses a fixed rate throughout the asset’s life, given by
 
: To calculate depreciation, <tt>'''DB'''</tt> uses a fixed rate throughout the asset’s life, given by
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:: rate = 1 - (salvagevalue/originalcost)<sup>(1/lifetime)</sup>
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:: <tt>'''rate'''</tt> = 1 - (<tt>'''salvagevalue'''</tt>/<tt>'''originalcost'''</tt>)<sup>(1/<tt>'''lifetime'''</tt>)</sup>
 
: rounded to 3 decimal places.
 
: rounded to 3 decimal places.
  
 
: The depreciation in any year is given by
 
: The depreciation in any year is given by
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:: value_at_start_of_year * rate
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:: <tt>'''value_at_start_of_year * rate'''</tt>
  
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: where value_at_start_of_year is originalcost - depreciation_so_far.
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: where <tt>'''value_at_start_of_year'''</tt> = <tt>'''originalcost'''</tt> - <tt>'''depreciation_so_far'''</tt>.
  
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: If months1styear is less than 12 the depreciation rate used for the first and last years is  
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: If <tt>'''months1styear'''</tt> is less than 12 the depreciation rate used for the first and last years is  
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:: rate * number_of_months_in_year / 12.
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:: <tt>'''rate'''</tt> * <tt>'''number_of_months_in_year'''</tt> / 12.
  
 
=== Example: ===
 
=== Example: ===
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:  returns approximately <tt>'''3690'''</tt> in currency units, which is the depreciation in the first year for an asset which cost 10000 and is written down to 1000 over 5 years.
 
:  returns approximately <tt>'''3690'''</tt> in currency units, which is the depreciation in the first year for an asset which cost 10000 and is written down to 1000 over 5 years.
  
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=== See also: ===
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=== Issues: ===
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[[Documentation/How_Tos/Calc: DDB function|'''DDB''']]
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* This method underestimates total depreciation slightly if <tt>'''months1styear'''</tt> is given and not 12.
  
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'''[[Documentation/How_Tos/Calc: Derivation of Financial Formulas|Derivation of Financial Formulas]]'''
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{{SeeAlso|EN|
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* [[Documentation/How_Tos/Calc: DDB function|DDB]]
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* [[Documentation/How_Tos/Calc: SLN function|SLN]]
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* [[Documentation/How_Tos/Calc: SYD function|SYD]]
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* [[Documentation/How_Tos/Calc: VDB function|VDB]]
  
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[[Documentation/How_Tos/Calc: Financial functions|'''Financial functions''']]
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* [[Documentation/How_Tos/Calc: Derivation of Financial Formulas|Derivation of Financial Formulas]]
  
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=== Issues: ===
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* [[Documentation/How_Tos/Calc: Financial functions|Financial functions]]
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* This function underestimates depreciation slightly if <tt>'''months1styear'''</tt> is not 12; this is likely to be a standard approach with this method.
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* [[Documentation/How_Tos/Calc: Functions listed alphabetically|Functions listed alphabetically]]
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* [[Documentation/How_Tos/Calc: Functions listed by category|Functions listed by category]]}}
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[[Category: Documentation/Reference/Calc/Financial functions]]

Latest revision as of 15:07, 30 January 2024

DB

Returns the depreciation of an asset for a given year using the fixed rate declining-balance method.

Syntax:

DB(originalcost; salvagevalue; lifetime; year; months1styear)

originalcost: the initial cost of the asset.
salvagevalue: is the value at the end of the depreciation (sometimes called the salvage value of the asset).
lifetime: the number of years over which the asset is being depreciated.
year: the year number for which the depreciation is calculated.
months1styear: the number of months in the first year (defaults to 12 if omitted).
To calculate depreciation, DB uses a fixed rate throughout the asset’s life, given by
rate = 1 - (salvagevalue/originalcost)(1/lifetime)
rounded to 3 decimal places.
The depreciation in any year is given by
value_at_start_of_year * rate
where value_at_start_of_year = originalcost - depreciation_so_far.
If months1styear is less than 12 the depreciation rate used for the first and last years is
rate * number_of_months_in_year / 12.

Example:

DB(10000; 1000; 5; 1)

returns approximately 3690 in currency units, which is the depreciation in the first year for an asset which cost 10000 and is written down to 1000 over 5 years.

Issues:

  • This method underestimates total depreciation slightly if months1styear is given and not 12.


See Also
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