What is the formula for the declining balance method of depreciation?

The formula for the declining balance method of depreciation is expressed as ( S = V(1 - t)^n ), where ( S ) represents the book value after ( n ) periods, ( V ) is the initial value or cost, ( t ) is the depreciation rate, and ( n ) is the number of periods.

This method calculates depreciation by applying a percentage (the depreciation rate) to the remaining book value (or asset value) at the beginning of each period, rather than subtracting a fixed amount each period. As a result, the amount of depreciation decreases over time since it's based on the book value rather than the original cost. Each year, the asset's value decreases based on a proportion of its current value, reflecting a realistic decline in the asset's usefulness.

The other formulas presented do not represent the declining balance method. The second formula suggests a linear approach to calculating value, which does not account for depreciation in relation to the asset's remaining value over time. The third formula implies a simple averaging method which does not consider how depreciation may accelerate in the early years of an asset's life. Lastly, the fourth formula also incorrectly formulates depreciation by incorporating addition rather than a reduction based on the asset's