The DDB method records larger depreciation expenses during the earlier years of an asset's useful life, and smaller ones in later years. As a result, companies opt for the DDB method for assets that are likely to lose most of their value early on, or which will become obsolete more quickly.

When would you use double declining balance?

The best reason to use double declining balance depreciation is when you purchase assets that depreciate faster in the early years. A vehicle is a perfect example of an asset that loses value quickly in the first years of ownership.

Why do companies use double declining balance instead of straight line depreciation when calculating their income taxes?

One reason for using double-declining balance depreciation on the financial statements is to have a consistent combination of depreciation expense and repairs and maintenance expense during the life of the asset.