ModeldrillDeclining balance depreciation
A financial modeling exercise from Modeldrill. Solve it with a live spreadsheet grid in your browser, with Fill right and Fill down, and it is checked the moment you submit.
The task
The asset is depreciated by the rate in B2 on its opening net book value each year, so the charge shrinks over time. Fill depreciation (row 6), the closing net book value (row 7) and the opening value for later years (row 5).
What this exercise teaches
Straight line charges the same amount every year. Declining balance charges a fixed percentage of what is left, so early years carry more depreciation and the book value never quite reaches zero.
A hint if you get stuck
Depreciation is the opening value times the locked rate. Closing is opening less depreciation, and the next year opens with it.
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