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The first year depreciation under the method is $100,000 ($250,000 x 40%).
What Is the Double-Declining Balance (DDB) Depreciation Method?
The lowering balance technique, also known as the double-declining balance depreciation (DDB) approach, is one of two popular ways a company would often account for the cost of a long-lived asset.
When opposed to straight-line depreciation, which employs the same amount of depreciation each year during an asset's useful life, the double-declining balance depreciation technique accelerates depreciation and counts as an expense more quickly. Similar to the falling balance approach, the double-declining method doubles the rate of asset depreciation.
In commercial accounting, an accelerated depreciation computation known as the double-declining balance (DDB) approach is employed.
More specifically, compared to the conventional declining balance technique, the DDB method depreciates assets twice as quickly.
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