Accounting Dictionary - Letter D

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Double declining balance method
is a depreciation method that applies a constant rate (double of the straight-line rate) to the net book value of the asset and produces a decreasing annual depreciation expense over the asset's useful life. The decrease in depreciation relates to the decrease in the asset's net book value in each subsequent period. The double declining balance method does not take into account the fixed asset's salvage value when depreciation is calculated for each accounting period. The salvage value only is considered closer to the end of the asset's useful life to ensure the book value is not reduced below the salvage value.
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