Thread: DDB Half Year Convention (2003)

1. DDB Half Year Convention (2003)

Does anyone have any experience with calculating depreciation using the double declining balance method, half year convention method? Excel has a formula to calculate the double declining balance; however, it doesn't appear to automatically factor in a convention such as half year which takes half of a years depreciation in year 1 and another half in the last year...

Thanks.

2. Re: DDB Half Year Convention (2003)

<P ID="edit" class=small>(Edited by sdckapr on 28-Jul-07 06:31. added PS)</P>I am not an accountant but a chemist and so I would check the logic with some sample values. But does this do what you want?

Steve

<pre>Option Explicit
Function DDBDepHYC(dCost As Double, iLife As Integer, iPeriod As Integer)
Dim dDep As Double
Dim dBase As Double
Dim dFactor As Double
Dim iUpper As Integer
Dim i As Integer

If iLife < 1 Or iPeriod < 1 Or _
(iLife + 1) < iPeriod Then
DDBDepHYC = CVErr(xlErrNum)
Exit Function
End If

dBase = dCost
iUpper = iLife
If iPeriod < iLife Then iUpper = iPeriod
dFactor = 1 / iLife * 2
dDep = dCost * dFactor / 2
For i = 2 To iUpper
dBase = dBase - dDep
dDep = dBase * dFactor
Next
If iPeriod > iLife Then
dBase = dBase - dDep
dDep = dBase * dFactor / 2
End If
DDBDepHYC = dDep
End Function</pre>

PS the source I used (some Example calculations) indicate that the 2nd "half-year" is not taken during the "last year" but the year after the last year. So if the expected life is 3 years, the 2nd "half-year" is taken in year 4 (year1 and year4 would be half-years) and this is the logic I used.

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