Accounting
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Double-Declining Balance

An accelerated depreciation method charging more expense in an asset’s early years.

Formula

D=2n×Book ValueD = \dfrac{2}{n}\times Book\ Value

Variables

DDepreciation expense
nUseful life (years)
Book ValueCurrent carrying value

Example

Asset $10k, life 5 yr, year 1: (2/5)×10k = $4k

Did You Know?

Accelerated depreciation defers taxes early on, improving a growing company’s cash flow when it needs it most.

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