The DDB function calculates the depreciation of an asset for a given time period based on the doubledeclining balance method (see note below).
Syntax
=DDB(cost,salvage,life,period,[factor])
Arguments
Argument  Description  

cost  The original cost of the asset  
salvage  The salvage value after the asset has been fully depreciated  
life  The useful life of the asset or the number of periods that you will be depreciating the asset  
period  The period that you wish to calculate the depreciation for. Use the same units as for the life  
[factor]  Optional. The rate at which the balance declines

Examples
The following spreadsheet shows the DB function is used to calculate the annual depreciation of an asset that cost $10,000 at the start of year 1, and has a salvage value of $1,000 after 5 years. [factor] is omitted from the function and assumes a value of 2.
A  B  C  D  E  

1  Data  
2  $10,000  Initial cost  
3  $1,000  Salvage value  
4  5  Life  
5  2  Factor  
6  
7  Year  Formula  Result  EOP Value  Accumulated Depreciation 
8  1  =DDB(10000,1000,5,1)  $4,000.00  $6,000.00  $4,000.00 
9  2  =DDB(A$2,A$3,A$4,A9)  $2,400.00  $3,600.00  $6,400.00 
10  3  =DDB(A$2,A$3,A$4,A10)  $1,440.00  $2,160.00  $7,840.00 
11  4  =DDB(A$2,A$3,A$4,A11)  $864.00  $1,296.00  $8,704.00 
12  5  =DDB(A$2,A$3,A$4,A12)  $296.00  $1,000.00  $9,000.00 
Note: The annual rate of depreciation in example above, calculated from the equation 1(Salvage/Cost)^(1/Life), is calculated to be 40.0% for years 14 years, then 22.8% for the 5th year.
Common Function Error(s)
Problem  What went wrong  

#VALUE!  Occurs if any of the supplied arguments are not numeric values  
#NUM!  Occurs if:

When calculating the depreciation of an asset, it is common to use an accelerated depreciation calculation, in which the calculated value of an asset is reduced by a larger amount during the first period of its lifetime, and smaller amounts during subsequent periods.
One of the most popular accelerated depreciation methods is the Double DecliningBalance Method, in which the straightline depreciation rate is doubled. A useful example of this is provided on the Wikipedia depreciation page
The Excel DDB function uses the following equation to calculate the depreciation:
where,
 salvage = final value of the asset at the end of its lifetime
 value = value of the asset at the start of the period
(= Initial cost – total depreciation from previous periods)  life = number of periods over which the depreciation occurs
 factor = rate of decline (= 2 for the doubledeclining balance method)