What is the double declining balance method?

Accounting Dec 17, 2020

Expert Solution

With assets that decline in value quickly, many businesses may choose to depreciate their assets using the double declining balance method. If the company buys a new vehicle for the business for $10,000 that has a 10-year life and no salvage value at the end, the first year's depreciation is $2,000 or double the amount that would be depreciated using a straight-line method. In year 2, the double declining method means that the amount depreciated is $1600 as 20% of the remaining balance is depreciated.

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