Analysis of Double Declining Depreciation Method

Depreciation is important for the owner of equipment from the technic economic point of view. In developed countries,various accelerating depreciation methods are used to obtain much more depreciation charges during the early years of equipment.These methods result in the early storage of replacement funds.Double Declining Depreciation (DDB) method is one of the depreciation methods established in recent years.There are some problems when DDB is used for depreciation calculation. To overcome these difficulties,it is necessary to adopt a composite depreciation method.That is to switch DDB to straight line depreciation. In this paper,three conversion approaches are introduced to engineers and managers for a better understanding of the principles of depreciation conversion from DDB to SL.