Are you having a difficult time without calculating the depreciation of fixed assets by the reducing balance method? You know you can use Excel to process it but don’t know which function to use to calculate it? The following share will guide you to use the VDB function in Excel to calculate depreciation of fixed assets by the reducing balance method.
Jaw VDB is a function that helps you calculate the depreciation of fixed assets by the reducing balance method. Using this calculation function will return the depreciation of the assets in the period you specify, including incomplete terms, using the double descending balance method or some other method you specify. VDB stands for Variable Declining Balance (descending balance changes).
VDB function in Excel
How to use the VDB function in Excel
1. Description and syntax used
This is a function that calculates the depreciation for an asset over multiple defined periods, the calculation function is based on the double-declining balance method.
VDB (cost, salvage, life, start_period, end_period, [factor], [no_switch])
– Cost: The initial cost of the property, is a fixed parameter.
– Salvage: The recovery value of an asset is the value after depreciation of the asset, which is a required parameter.
– Life: Number of depreciation periods of the asset, which is a required parameter.
– Start_period: The first period to calculate the depreciation of the property, is a required parameter.
– End_period: The last period to calculate depreciation, is a required parameter.
– Factor: Balance reduction ratio, which is an optional parameter, if omitted, is 2.
– No_switch: The logical value used to determine whether or not the amortization is greater than the reduction of the balance to a straight-line depreciation method.
+ Case No_switch = TRUE: Do not switch to straight-line depreciation method even if the amortization value is larger than the declining balance.
+ Case No_switch = FALSE or skip: Carrying to the depreciation method according to the acceleration path when the depreciation value is larger than the declining balance.
– In case you do not want to use the double-declining balance method when calculating depreciation -> change the value Factor.
– All parameters (apart from No_switch) must be a positive number.
2. Examples of specific situations
To give you a better idea of how to use this function, please see a specific example below:
2.1. Calculate depreciation of assets after the first day
You enter the formula in the cell C5 = VDB (A3, B3, C3 * 365,0,1) as shown below:
As you can see, the investment assets in this example are 10 years. The unit is calculated by year but the requirement here is to calculate daily depreciation, so I multiplied 10 years by 365 days per year as the value. Life up here
Next -> you press Enter to get results:
2.2. Asset depreciation for the first month
Similar to depreciation on the first day. Here I will multiply 10 years by 12 January as shown below:
You press Enter To get the result of the calculation function:
2.3. Calculate depreciation of assets from the 2nd month to the 9th month
Here you only need to enter the value of depreciation time and you will get the desired result:
Next, click Enter To get the result of the calculation function:
2.4. Asset depreciation for the first year
You enter the task in the box C8 = VDB (A3, B3, C3,0,1) as shown below:
Next, click Enter to get results:
The article on Taimienphi.vn has shown you how to use it VDB function in Excel. Using this function helps you calculate the depreciation of assets over multiple defined periods (the calculation function is based on the double-declining balance method).
In case, if you need to calculate depreciation value of assets using the straight-line method, you should use SLN function to calculate and process. Good luck!