What is VDB function in Excel?
VDB function is one of Financial functions in Microsoft Excel that returns the depreciation of an asset for any period you specify, including partial periods, using the double-declining balance method or some other method you specify. VDB stands for variable declining balance.
Syntax of VDB function
VDB(cost, salvage, life, start_period, end_period, [factor], [no_switch])
The VDB function syntax has the following arguments:
- Cost: The initial cost of the asset.
- Salvage: The value at the end of the depreciation (sometimes called the salvage value of the asset). This value can be 0.
- Life: The number of periods over which the asset is depreciated (sometimes called the useful life of the asset).
- Start_period: The starting period for which you want to calculate the depreciation. Start_period must use the same units as life.
- End_period: The ending period for which you want to calculate the depreciation. End_period must use the same units as life.
- Factor(Optional): The rate at which the balance declines. If factor is omitted, it is assumed to be 2 (the double-declining balance method). Change factor if you do not want to use the double-declining balance method. For a description of the double-declining balance method, see DDB.
- No_switch(Optional): A logical value specifying whether to switch to straight-line depreciation when depreciation is greater than the declining balance calculation.
- If no_switch is TRUE, Microsoft Excel does not switch to straight-line depreciation even when the depreciation is greater than the declining balance calculation.
- If no_switch is FALSE or omitted, Excel switches to straight-line depreciation when depreciation is greater than the declining balance calculation.
Important: All arguments except no_switch must be positive numbers.
Example of VDB function
Steps to follow:
1. Open a new Excel worksheet.
2. Copy data in the following table below and paste it in cell A1
Note: For formulas to show results, select them, press F2 key on your keyboard and then press Enter.
You can adjust the column widths to see all the data, if need be.
|10||Lifetime in years|
|=VDB(A2, A3, A4*365, 0, 1)||First day’s depreciation. Excel automatically assumes that factor is 2.||$1.32|
|=VDB(A2, A3, A4*12, 0, 1)||First month’s depreciation.||$40.00|
|=VDB(A2, A3, A4, 0, 1)||First year’s depreciation.||$480.00|
|=VDB(A2, A3, A4*12, 6, 18)||Depreciation between the sixth month and the eighteenth month.||$396.31|
|=VDB(A2, A3, A4*12, 6, 18, 1.5)||Depreciation between the sixth month and the eighteenth month using a factor of 1.5 instead of the double-declining balance method.||$311.81|
|=VDB(A2, A3, A4, 0, 0.875, 1.5)||Depreciation for the first fiscal year that you own the asset, assuming that tax laws limit you to 150-percent depreciation of the declining balance. Asset is purchased in the middle of the first quarter of the fiscal year.||$315.00|