Declining-Balance Depreciation

When choosing a declining-balance method other than a MACRS method, you have 24 choices. Each method is different based on the percentage used (125%, 150%, 175%, or 200%), the averaging convention used (see Depreciation Methods for an explanation of the conventions), and whether it will switch from declining-balance depreciation to straight-line at the optimal point. The optimal point is when the remaining value over the remaining life depreciation calculations result in more depreciation than declining-balance. In either case, the system calculates depreciation through the final year of the asset's estimated life.