Declining Balance Method(redirected from Declining-Balance Method of Depreciation)
Declining Balance Method
A way of calculating the depreciation of an asset whereby one subtracts a certain percentage of its current value each year. For example, suppose an asset costing $100,000 depreciates 10% each year. After the first year, it depreciates to $90,000. In the second year, one deducts 10% from the $90,000, rather than the original $100,000. Thus, the depreciated value after the second year is $81,000. This is a common means of calculating depreciation.