Calculate double-declining and 150% declining balance depreciation with switchover to straight-line and book value charts.
A falling book value, rather than a fixed annual amount, drives this depreciation schedule. Enter an asset's cost, salvage value, and useful life, then select double-declining balance or 150% declining balance. The calculator produces annual depreciation and book values, switching to straight-line when that gives the larger remaining deduction. A common surprise is that salvage value acts as a floor. It is not subtracted from cost before each declining-balance percentage is applied.
A concrete input and expected output from the current implementation.
Input
Cost: $1,000; salvage value: $0; useful life: 5 years; method: double-declining balance
Expected output
Rate: 40%. Year 1: $400 depreciation, $600 closing book value. Year 2: $240, $360. Year 3: $144, $216. Year 4: $108, $108, switching to straight-line. Year 5: $108, $0.
The first three charges equal 40% of opening book value. In year 4, straight-line gives $216 / 2 = $108 per remaining year, exceeding the declining-balance amount of $216 x 40% = $86.40.
For double-declining balance, the annual rate is 2 divided by useful life; for 150% declining balance, it is 1.5 divided by useful life. Each declining-balance charge is that rate times the year's opening book value. Salvage value limits the final book value instead of reducing the opening cost used for the percentage calculation.
For each year, the calculator compares declining-balance depreciation with straight-line depreciation on the remaining amount above salvage over the remaining life. When straight-line becomes larger, the schedule switches methods for the remaining years. The resulting schedule and book-value chart show when the crossover occurs and how each charge reduces the asset's carrying value.
Declining-balance methods generally apply the selected rate to beginning book value. The salvage estimate instead sets the lowest permitted closing book value. By contrast, straight-line depreciation allocates the remaining depreciable amount, which is book value minus salvage, across the years still left.
No. This is a mathematical declining-balance schedule based on the supplied inputs, not a determination of tax eligibility, recovery class, convention, or required method. Tax treatment can depend on jurisdiction, property type, placed-in-service date, elections, and prescribed conventions. Consult the applicable rules or a qualified tax professional before filing.
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