Written down value and the fixed-asset schedule

The Written Down Value (WDV) method is also called the declining (diminishing) balance method. It charges a fixed rate on the asset's value at the beginning of each year, that is, on what is left after earlier depreciation. So the charge is biggest in the first year and gets smaller every year.

Excel's function is =DB(cost, salvage, life, period, month):

• cost: acquisition cost; salvage: scrap value; life: useful life in years.
• period: the year for which depreciation is being worked out.
• month: the number of months in the first year, because an asset bought part-way through the year is depreciated only for the months it was used.

With the year ending on 31 March, the period depends on whether the asset was installed before or after March. The book's formulas combine YEAR, MONTH, DATE, AND, IF and ROUND, with the year-end date held in an absolute cell ($F$3).

The schedule of fixed assets, part of the balance sheet, shows for each asset:

• Gross block: opening, additions, deductions, closing. Closing gross block = opening + additions − deductions.
• Depreciation: opening, for the year, on deductions, closing. Closing depreciation = opening + this year's − on deductions.
• Net block = gross block − depreciation.