double-declining-balance depreciation business definition

A depreciation method that records large depreciation expenses in the early years of an asset's life and reduced depreciation expenses in the later years of an asset's life. The acceleration of depreciation is designed to reduce taxable income and tax payments so that extra cash will be available for reinvestment. According to this method, depreciation is calculated by multiplying twice the straight-line depreciation rate by the asset's book value each year. See also Modified Accelerated Cost Recovery System.