Double Declining Balance (DDB)

Definition

An accelerated depreciation method expensing more in early years — appropriate for fast-obsolescing assets like GPUs.

Formula

Rate = 2 / Useful life
Year-n depreciation = Rate x Book value at start of year n

Worked Example

Server: cost $9,600, life 4 years, salvage $600. Rate = 50%.

Year 1: 50% x $9,600 = $4,800  -> book value $4,800
Year 2: 50% x $4,800 = $2,400  -> book value $2,400
Year 3: 50% x $2,400 = $1,200  -> book value $1,200
Year 4: limited to $600 so book value stops at salvage

Compare year-1 expense: $4,800 (DDB) vs $2,250 (straight-line).
Same lifetime total — only timing differs.

Interpretation & Pitfalls

Acceleration shifts expense earlier, lowering early profit and taxes (where permitted). It never changes the total.

In TupicFinance

Method is a property of the asset record; the schedule generator applies whichever pattern is configured.