Declining-balance depreciation: Applying Depreciation to Opening Book Value
Declining-balance depreciation applies a rate to the opening carrying amount. As that amount falls, the same percentage produces a smaller charge.
Use the Declining-balance depreciation Calculator to enter your own figures and compare the result with the worked example below.
Declining-balance depreciation formula
Depreciation = Opening book value × Depreciation rate
Worked example
| Item | Example value |
|---|---|
| Opening book value | 10000 USD |
| Depreciation rate | 20 % |
| Salvage value | 1000 USD |
| Declining-balance depreciation | 2,000 USD |
These are illustrative inputs, not current prices, rates or recommended targets. Where a currency is shown, keep all comparable money amounts in the same currency; conversion examples identify the two sides separately.
How to interpret the result
Check salvage-value floors and the applicable convention. Do not keep depreciating below an allowed residual value without justification.
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Method and further reading
The example follows the FinMathly calculator method. For broader background, see SEC: Understanding financial statements. The background resource may use jurisdiction-specific terms; it does not replace the assumptions of this calculator.
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