Accounting and Finance for Lawyers

Double Declining Method


The double declining method depreciates by taking the percent of the useful life the year is, doubling it, and multiplying it by the opening balance.

  • Note that unlike the others, scrap value does not change this depreciation every year. It just cannot depreciate it below such value.
Example
Year Historical Cost Opening Balance Depreciation Expense (20%) Accumulated Depreciation Book Value
1 $100,000 $100,000$20,000$20,000$80,000
2 $100,000 $80,000$16,000$36,000$64,000
3 $100,000 $64,000$12,800$48,800$51,200
4 $100,000 $51,200$10,240$59,040$40,960
5 $100,000 $40,960$8,192$67,232$32,768
6 $100,000 $32,768$6,554$73,786$26,214
7 $100,000 $26,214$5,243$79,028$20,972
8 $100,000 $20,972$972$80,000$20,000
9 $100,000 $20,000$0$80,000$20,000
10 $100,000 $20,000$0$80,000$20,000