If you are trying to compare AssetAccountant's DDB (double declining balance or diminishing balance) depreciation expense calculations and feel they are incorrect, we can assure you that after years of posting journals and reporting depreciation for tax for some of the world's largest companies and accounting firms, the numbers AssetAccountant produces for you are VERY precise!
Firstly if the output is not what you expect, inspect very carefully the data you have entered into AssetAccountant.
Purchase and first use dates, rates and method of depreciation, opening balances and the settings you have nominated in Register Settings will all have a profound impact on the output you receive in journals and tax reports.
How does AssetAccountant calculate double declining balance (DDB) and diminishing value (DV) methods of depreciation?
This is best explained by way of example.
Cost of asset: $38,678.47
Method: Diminishing Value (DDB), DV200 over 5 years (40%)
First use date: 29 November, 2024
Financial year: 01 Jul -> 30 Jun
The calculation works by taking the percentage of the method you select, DV200 ÷ 5 years which is expressed as 40%.
If you have selected daily depreciation in Register Settings, then the daily depreciation calculation for the first financial year the asset is owned is:
$38,678.47 x 40% ÷ 365 = $42.39
Up until the end of the first financial year, 30 June 2025, each day is depreciated at that rate so 29 + 30 Nov = 2 x $42.39 = $84.78 then for each 31 day month, the depreciation calculation is $1,314.01, and so on.
Then the base cost of the asset is reset at the end of the financial year.
Which means the remaining Written Down Value (book value) on 01 July 2025 is $29,607.57 therefore the depreciation per day for the next financial year is calculated as:
$29,607.57 x 40% ÷ 365 = $32.45