Double-Declining Balance
An accelerated depreciation method that applies twice the straight-line rate to the asset's remaining book value.
What is Double-Declining Balance?
Double-declining balance (DDB) is an accelerated depreciation method that applies twice the straight-line depreciation rate to the remaining book value of an asset each year. This front-loads depreciation expense, reducing taxable income more in early years. It is commonly used for assets that lose value quickly, such as technology equipment.
Example
Example
A $10,000 asset with a 5-year life has a 20% straight-line rate. DDB applies 40%: Year 1 depreciation is $4,000; Year 2 is 40% × $6,000 = $2,400; each year the depreciation base shrinks as book value declines.