VDB – Variable Declining Balance method of depreciation
Syntax:
=VDB(cost,salvage,life,start_period,end_period,[factor],[no_switch])
cost: cost of the asset
salvage: residual value of asset at the end of its useful life
life: useful life of asset
start_period: period from which you want to commence depreciation calculation
end_period: period up to which you want to calculate depreciation expense
factor (optional): depreciation coefficient. If not mentioned then excel assumes the factor of 2 i.e. double declining rate.
no_switch (optional): whether you want method to switch from declining balance method to straight line if depreciation according to straight-line method is greater than depreciation under declining balance method. Values are either TRUE or FALSE. If TRUE the method will not switch and if FALSE or omitted then method will switch to straight-line.
Example
One of the lesser known depreciation methods. The readers who are not aware how this method works should read this article. To carry out depreciation on the basis of this method following steps are helpful:
Step 1: Click on tab named VDB and make this worksheet active. Observe the data
Step 2: In cell B15 enter this formula: =VDB(B7,B8,B9,B10,B11,B12,B13) and hit enter. Depreciation is the resultant
You can practice the application of this depreciation method in Excel with the following live worksheet
