The DB function with example in Excel

In Excel, the DB function is used to calculate the depreciation of an asset for a specific period using the fixed-declining balance method. This method assumes that the asset loses value by a fixed percentage each period.

The syntax of the DB function is:

scss
DB(cost, salvage, life, period, [month])

Where:

• cost: The initial cost of the asset.
• salvage: The value of the asset at the end of its useful life.
• life: The number of periods over which the asset will be depreciated.
• period: The period for which you want to calculate the depreciation.
• [month]: Optional argument that specifies the number of months in the first year. If omitted, it is assumed to be 12.

Here's an example:

Let's say you bought a piece of equipment for $10,000 with an estimated salvage value of $1,000 after 5 years. You want to calculate the depreciation expense for the first year.

arduino
Cost of the equipment (cost) = $10,000
Salvage value (salvage) = $1,000
Useful life (life) = 5 years
Period (period) = 1 year

Using the DB function:

scss
=DB(10000, 1000, 5, 1)

This will give you the depreciation expense for the first year. If you have the months specified, you would provide that as the last argument:

scss
=DB(10000, 1000, 5, 1, 12)

This would be for a 12-month period in the first year.