Related Function:

The VDB function calculates the depreciation of an asset for a given time period based on a variable declining balance depreciation method.

Syntax

=VDB(cost,salvage,life,start_period,end_period,[factor],[no_switch])

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
start_period The starting period that you wish to calculate the depreciation for. Use the same units as for the life
end_period The ending period that you wish to calculate the depreciation for. Use the same units as for the life
[factor] Optional. It is the rate to use for the declining balance. If this parameter is omitted, the VDB function will assume a [factor] of 2
[no_switch] Optional. It can either be a value of TRUE or FALSE. If the [no_switch] parameter is omitted, the VDB function will assume a [no_switch] value of FALSE

TRUE Excel will use the declining balance method of depreciation – NO SWITCH to straight line depreciation
FALSE Excel WILL SWITCH to the straight-line depreciation method when the straight-line depreciation is greater than the declining balance depreciation amount (default)

Examples

  A B C D
1 Data      
2 $30,000.00 Asset cost    
3 $3,000.00 Salvage value    
4 10 Life (years)    
5        
6 Formula Result Notes
7 =VDB(A2,A3,A4*365,0,1) $16.44 First day’s depreciation. Excel automatically assumes that factor is 2
8 =VDB(A2,A3,A4*12,0,1) $500.00 First month’s depreciation
9 =VDB(A2,A3,A4,0,1) $6,000.00 First year’s depreciation
  =VDB(A2,A3,A4*12,6,18) $4,953.83 Depreciation between the sixth month and the eighteenth month
10 =VDB(A2,A3,A4*12,6,18,1.5) $3,897.61 Depreciation between the sixth month and the eighteenth month using a factor of 1.5 instead of the double-declining balance method
11 =VDB(A2,A3,A4,,5) $20,169.60 Depreciation between purchase and end of year 5

Common Function Error(s)

Problem What went wrong
#VALUE! Occurs if any of the supplied arguments are not numeric values
#NUM! Occurs if either:

  any of the supplied cost, salvage, start_period, end_period or [factor] arguments are < 0
  the supplied life argument is ≤ 0
  the start_period is > the end_period
  the start_period is > life or the end_period is > life

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 Declining-Balance Method, in which the straight-line depreciation rate is doubled. 

The Excel VDB function uses the Double Declining-Balance Method by default. However, the function allows you to specify a factor to multiply the straight line depreciation by, therefore allowing the user to determine the rate of depreciation.