Question

How do you calculate double-declining-balance with crossover to straight-line using the depreciation worksheet on the TI BA 2 Plus? For example, equipment cost: $1,000,000; useful estimated life: 8 years; estimated residual value: $50,000; half-year convention. All values the worksheet gives are correct for computing straight line, as well as all the years for ddb except for years 7-9 (depreciation of $63,056.64 for years 7 & 8, and $31,528.32 for year 9, but all should be $52,547.20). It uses the remaining balance after year 6 without subtracting the salvage value, so you have to exit the worksheet and compute these manually. Is there anyway to make the calculator compute this correctly, so the extra step (and potential mistakes) can be avoided?

Answer 1

In Straight Line Depreciation method we are using the formula of to get depreciation amount

Asset Value-Salvage value / Useful life

but in Double Declining method we follow the same rule like straight line but we just multiply the number by 2 and that is it.S first of all calculate the DDB following with Straight Line Depreciation method. and for 7,8&9 just minus the amount from the book value of 6 years. You can also re verify with adding the depreciation with the book value if the asset cost is exactly same after adding the book value with all years depreciation then this will be fine.