The DDB method simply doubles the straight-line depreciation amount that is taken in the first year, and then that same percentage is applied to the un-depreciated amount in subsequent years.
DDB In year i = (2 / n) *
(total acquisition cost - accumulated depreciation till (i-1) year)
n = number of years
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Example
For $2 million, Company ABC purchased a machine that will have an estimated useful life of five years. The company also estimates that in five years the company will be able to sell it for $200,000 for scrap parts.
For $2 million, Company ABC purchased a machine that will have an estimated useful life of five years. The company also estimates that in five years the company will be able to sell it for $200,000 for scrap parts.
DDB for year 1 = (2/5)*(2,000,000 – 0) = 800,000
DDB for year 2 = (2/5)*(2,000,000 – 800,000) = 480,000
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