double-declining balance

Meanings

1. 1noununcountablefinancetechnical

   An accounting method that writes off an asset's cost faster at the start by applying twice the straight-line rate to its remaining book value each year.

   Grammar: Often used with the or as a modifier: the double-declining balance method.

   Patterns

   • double-declining balance method
   • depreciate using double-declining balance

   The firm used double-declining balance to depreciate its delivery trucks.

   Under double-declining balance, the largest deduction comes in the first year.

   Students learned how double-declining balance differs from straight-line depreciation.

2. 2adjectivebefore a nountechnical

   Describing a depreciation approach or calculation that uses this accelerated declining method.

   Grammar: Used before nouns such as method or depreciation.

   Patterns

   • double-declining balance depreciation

   The accountant explained the double-declining balance method to the new staff.

   A double-declining balance schedule shows larger charges early on.

   They chose a double-declining balance approach for the new computers.

Common combinations

double-declining balance method

The double-declining balance method front-loads expenses.

apply double-declining balance

We apply double-declining balance to equipment.

double-declining balance depreciation

Double-declining balance depreciation suits fast-aging assets.

switch from double-declining balance

Companies sometimes switch from double-declining balance to straight-line.

calculate double-declining balance

Use a spreadsheet to calculate double-declining balance.

Synonyms and how they differ

accelerated depreciation

Accelerated depreciation is the broader category, while double-declining balance is one specific method within it.

declining balance method

The declining balance method can use any multiple, whereas double-declining balance uses exactly twice the straight-line rate.

reducing balance

Reducing balance is the British name for a similar approach, but it does not always use the double rate.

Opposites

Word family

depreciation noun

the gradual loss in value of an asset over time

depreciate verb

to lose value over time

book value noun

an asset's cost less accumulated depreciation

salvage value noun

the estimated worth of an asset when its useful life ends

Commonly confused: double-declining balance or declining balance loan? double-declining balance or straight-line depreciation?

Practice

Make it your own

Write a sentence using “double-declining balance”, then check it and compare it with the examples above.

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