Question

(T / F) The formula for DDB depreciation is: Depreciation per period = (2×straight-line rate)×(Asset cost – Accumulated deprecation.)

Answer 1

Double declaiming method depreciation calculation = 2 times of Depreciation rate under Straight line method of depreciation *(Original Asset cost - Accumulated depreciation)

Ans) True

Example: Asset cost = $100,000 life = 4 years

Staright line depreciation rate = 100/4 =25%

DDB depreciation rate = 25*2 =50%

1st year depreciation = 100,000*50% = 50,000

2nd year = (100,000-50,000 1st year dep)*50% = $25,000

3rd year = (100,000-50,000-25,000)*50% = $12,500 .......