Microsoft KB Archive/165722

= Microsoft Knowledge Base =

XL: Incorrect Formula in Help for DDB Function
Last reviewed: April 24, 1997

Article ID: Q165722

The information in this article applies to:


 * Microsoft Excel 97 for Windows
 * Microsoft Excel for Windows 95, version 7.0
 * Microsoft Excel for Windows, versions 3.0, 4.0, 4.0a, 5.0, 5.0c
 * Microsoft Excel for the Macintosh, versions 3.0, 4.0, 5.0, 5.0a

SYMPTOMS
In the "User's Guide" for Microsoft Excel and in Help, the formula that is used to calculate the double-declining balance function (DDB) is incorrect.

CAUSE
In the "User's Guide" and in Help, the DDB worksheet function uses the following formula to calculate depreciation for a period:

Cost-Salvage(Total_Depreciation_From_Prior_Periods)*Factor/Life This formula is incorrect. If you use this formula it does not return the same result that the DDB function returns.

RESOLUTION
To calculate depreciation using the DDB method for all periods up to the last period, use the following formula:

((Cost - Salvage) - Depreciation_From _Prior_Periods) * (Factor / Life) NOTE: In the last period the depreciation must be calculated using the following formula:

Cost - Salvage - Depreciation_From _Prior_Periods

STATUS
Microsoft has confirmed this to be a problem in the Microsoft products listed at the beginning of this article. We are researching this problem and will post new information here in the Microsoft Knowledge Base as it becomes available.

MORE INFORMATION
The DDB worksheet function returns the depreciation of an asset for a specified period using the double-declining balance method or some other method that you specify. The double-declining balance method computes depreciation at an accelerated rate. Depreciation is highest in the first period and decreases in successive periods.