How to use the DB function in Excel

The DB function calculates the depreciation of an asset using the fixed declining balance method for a specified period. It utilizes the following arguments to perform its operations:

=DB(cost; salvage; life; period; [month])

• Cost (Required Argument): This is the initial cost of the asset.
• Salvage (Required Argument): This is the value of the asset at the end of its depreciation, also known as the salvage value.
• Life (Required Argument): This represents the number of periods over which the asset depreciates, often referred to as the asset’s useful life.
• Period (Required Argument): This is the specific period for which the depreciation is calculated.
• Month (Optional Argument): This indicates the number of months in the first year used for depreciation calculation. If omitted, the function defaults to 12 months.

Using the DB Function
Let’s calculate the depreciation of an asset with an initial cost of £200 000, a salvage value of £8 000 after 5 years, and a depreciation period of 2 years with 4 months in the first year.

To find the depreciation value using the DB function:

1. Select an empty cell and enter the function with its arguments:
   =DB(B2; B3; B4; B5; B6)
   (Where B2 = Cost, B3 = Salvage, B4 = Life, B5 = Period, B6 = Month)

1. Press Enter, and the depreciation value of the asset will be displayed as £79958,33, as shown in the table below.

Important Notes When Using the DB Function

• A #VALUE! error occurs if any of the arguments provided are non-numeric.
• A #NUM! error occurs in the following cases:
  • If the cost or salvage value is less than zero.
  • If the life or period argument is less than or equal to zero.
  • If the month argument is less than or equal to zero or greater than 12.
  • If the period argument is greater than the life argument and the month argument is omitted.
  • If the period provided is greater than life + 1.