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Or "accelerate depreciation", it´s regarded to the accelerated diminution of the assets values of a company, resulted from the superior operational use.
Double declining method depreciation is one of the depreciation method used in allocating expenses in acquisition of long lived assets.
It is an accelerated type of depreciation that results to higher depreciation expenses in the beginning of asset's life and smaller depreciation in the later years.
Formula is: straight line depreciation rate x 2 x book value at the beginning of the year.
* Certain assets depreciate exponentially over a given time period. This type of depreciation is referred to as double declining balance method of calculating depreciation and it allows the company to account for accelerated depreciation.
* The double declining balance depreciation is normally used when an asset is depreciating at a faster rate at the beginning of its lifespan.
* The method is a little more complicated to calculate than the straight line method and it normally requires that the straight line depreciation rate is calculated first.
formula
Double declining balance rate multiply by book value at the beginning of the year.
The double declining balance method of depreciation, also known as the 200% declining balance method of depreciation, is a common form of accelerated depreciation. Accelerated depreciation means that an asset will be depreciated faster than would be the case under the straight line method. Although the depreciation will be faster, the total depreciation over the life of the asset will not be greater than the total depreciation using the straight line method. This means that the double declining balance method will result in greater depreciation expense in each of the early years of an asset's life and smaller depreciation expense in the later years of an asset's life as compared to straight line depreciation.