Reducing-Balance Depreciation
Calculate a reducing-balance (declining-balance) depreciation schedule for a UK fixed asset — the annual charge shrinks each year as it applies to net book value.
Daten geprüft · Juli 2026
Why is the depreciation charge different each year under this method?
Because the rate is applied to the net book value at the start of each year, not to the original cost — as net book value falls, so does each subsequent year's charge.
Quelle: FRC — FRS 102 s.17 Property, Plant and Equipment (depreciation methods); Companies Act 2006 s.396 (consistent depreciation policy). · aktualisiert 2026
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Alles über Reducing-Balance Depreciation
📋Überblick+
Under the reducing-balance method, each year's depreciation charge is a fixed percentage of the asset's net book value at the start of that year, so the charge shrinks year over year rather than staying constant. This suits assets that lose most of their economic value early — vehicles, computers, some plant — and depreciation automatically stops once net book value reaches the residual (salvage) value.
💡 Bewährte Vorgehensweisen
- Reducing-balance depreciation never fully writes an asset down to zero mathematically — set a residual value if you want the charge to stop at a realistic salvage floor.
- Compare the reducing-balance schedule to straight-line for the same asset before choosing — reducing-balance front-loads the expense, which suits assets that depreciate fastest when new.
- FRS 102 s.17 requires the depreciation method to reflect the pattern of economic benefit consumption — document why reducing-balance was chosen over straight-line for audit purposes.
🔢 Konkretes Beispiel
£20,000 asset depreciated at 25% reducing balance: year 1 charge is £5,000, leaving a net book value of £15,000 after year 1.
📖Anleitung+
So verwenden Sie diesen Rechner
- 1
Enter the asset's original cost and the annual reducing-balance rate as a percentage.
- 2
Enter the number of years elapsed since acquisition to see the current position.
- 3
Enter a residual value if the asset should not be depreciated below a salvage floor.
- 4
Read the current year's charge, accumulated depreciation and net book value.
📚Glossar+
- Reducing-balance method
- A depreciation method that applies a fixed percentage rate to the asset's net book value at the start of each year, producing a charge that decreases year over year.
- Net book value (NBV)
- The asset's original cost minus accumulated depreciation to date — the carrying value on the balance sheet at a given point in time.
ℹ️Quellen & Aktualisierung+
Letzte Datenaktualisierung
7. Juli 2026
Quellen und Referenzen
FRC — FRS 102 s.17 Property, Plant and Equipment (depreciation methods); Companies Act 2006 s.396 (consistent depreciation policy).
Die Daten dieses Rechners werden regelmäßig aktualisiert, um die neuesten offiziellen Sätze abzubilden. Im Zweifel konsultieren Sie die oben genannten offiziellen Quellen.
FAQ — Reducing-Balance Depreciation
Why is the depreciation charge different each year under this method?+
Because the rate is applied to the net book value at the start of each year, not to the original cost — as net book value falls, so does each subsequent year's charge.
What happens once net book value nears the residual value?+
The calculator caps each year's charge so net book value never falls below the residual value you entered — depreciation effectively stops once that floor is reached.