# Double-declining-balance depreciation method

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## Double-declining-balance depreciation method (DDB)

An accounting methodology in which the depreciation rate used is double the rate used under the straight-line method. In addition, the rate is applied to the full purchase cost of the asset, whereas under the straight-line method the rate is applied to the cost net of salvage value.

## Double-Declining-Balance Depreciation Method

A way of calculating the depreciation of an asset that assumes the asset loses value at double the rate of the straight-line method. One calculates the DDB by depreciating double the straight-line value for the first year, and then depreciating the same percentage for each remaining year of the asset's usable life. DDB is a form of accelerated depreciation.
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In the example, the DDB method yields a \$10,640 deduction; the DB method would yield a \$7,980 deduction.
A computer used more than 50% of the time for a "qualified business use" (QBU) of the taxpayer can be depreciated using the DDB method and a five-year life; alternatively, the cost can be expensed under Sec.
M's 1996 depreciation deduction is \$80 (\$2,000 X 80% (business/investment use) X 1.5/12 (acquired in the last quarter) X 40% (five-year DDB method)).

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