Double Declining — Expense

This formula tells you how much value an asset loses in a single year using a method called "accelerated depreciation." Depreciation is simply the way we spread the cost of something expensive—like a delivery truck or a piece of machinery—over the years we expect to use it, rather than counting the whole cost in the year we bought it. "Accelerated" means we record more of that loss in the early years and less later on.

To calculate it, you multiply two things together. The first is the DR, or "depreciation rate," which for the double-declining method is twice the normal straight-line rate. (Straight-line rate is just 1 divided by the number of years of useful life; you double it.) The second is the "book value at the start of the year"—that is, the asset's original cost minus all the depreciation already taken in earlier years. So DE (the depreciation expense) = DR × book value at start of year.

Read the result as a dollar amount: it's how much value the asset lost this year. Notice that because the book value shrinks every year, the expense also shrinks every year—big write-offs early, smaller ones later. A project manager uses this when an asset loses most of its usefulness quickly (like computers or vehicles) and when the organization wants larger tax deductions up front.