## How to use the VDB function

**What is the VDB function?**

The VDB function calculates the depreciation of an asset for a given period using the double-declining balance method or based on user input, you may use partial periods in this function. VDB is an abbreviation for variable declining balance.

**What is depreciation of an asset?**

Depreciation is an accounting method that allows businesses to allocate the cost of a tangible asset over its useful life. It represents how much of an assetâ€™s value has been used up over time.

Depreciation helps businesses to match their expenses with their revenues, and to reduce their taxable income by deducting the depreciation expense.

**What is the the double-declining balance method?**

The double-declining balance method is an accelerated depreciation technique used in accounting and finance, it is a specific application of the declining balance method.

Depreciation is calculated by multiplying the asset's book value by a fixed rate of 200% each year. This results in the asset being fully depreciated over roughly half the straight-line depreciation schedule.

The depreciation amount declines each year as the asset's book value declines, depreciation is highest in the first year, tapering down each subsequent year.

**Depreciation functions in Excel**

Function | Description |
---|---|

SYD(cost, salvage, life, period) | Sum-of-the-years digits depreciation |

DB(cost, salvage, life, period, [month]) | Fixed-declining balance depreciation |

DDB(cost, salvage, life, period, [factor]) | Double-declining balance depreciation |

AMORLINC(cost, date_purchased, first_period, salvage, period, rate, [basis]) | Depreciation for period using linear method |

AMORDEGRC(cost, date_purchased, first_period, salvage, period, rate, [basis]) | Depreciation from date of purchase to end of period |

VDB(cost, salvage, life, start_period, end_period, [factor], [no_switch]) | Variable declining balance depreciation |

### VDB Function Syntax

VDB(*cost, salvage, life, start_period, end_period, [factor], [no_switch]*)

### VDB Function Arguments

Cost |
Required. What you pay for the asset. |

Salvage |
Required. The value of the asset at the end of depreciation. |

Life |
Required. The number of periods the asset is being depreciated. |

Start_period |
Required. The start of the range you want to calculate the depreciation. Start_period must use the same units as life. |

End_period |
Required. The end of the range you want to calculate the depreciation. End_period must use the same units as life. |

[factor] |
Optional. How quickly the balance declines, default value is 2 (the double-declining balance method). |

[no-switch] |
Optional. Â A boolean value determining whether to use to straight-line depreciation when depreciation is larger than the declining balance calculation.
TRUEÂ - Does not switch to a straight-line depreciation even if the depreciation is larger than the declining balance calculation. FALSE - Switches to straight-line depreciation if the depreciation is larger than the declining balance calculation. |

**What is salvage value?**

Salvage value is the estimated value of an asset at the end of its useful life. It is also known as scrap value or residual value. It is used to calculate the depreciation expense of an asset over its useful life.

### VDB Function example

Formula in cell D12:

### VDB Function not working

All arguments must be positive numerical valuesÂ except *no_switch*.

### Functions in 'Financial' category

The VDB function function is one of many functions in the 'Financial' category.

## How to comment

How to add a formula to your comment<code>Insert your formula here.</code>

Convert less than and larger than signsUse html character entities instead of less than and larger than signs.

< becomes < and > becomes >

How to add VBA code to your comment[vb 1="vbnet" language=","]

Put your VBA code here.

[/vb]

How to add a picture to your comment:Upload picture to postimage.org or imgur

Paste image link to your comment.

Contact OscarYou can contact me through this contact form