How does the depreciation rate behave in the double declining method?

In the double declining balance method of depreciation, the depreciation rate remains consistent throughout the useful life of the asset. The method employs a fixed percentage, specifically double the straight-line rate, applied to the beginning book value of the asset each year. This means that while the actual dollar amount of depreciation may change year to year due to the declining book value of the asset, the underlying rate applied does not fluctuate.

This consistency allows for predictable calculations in terms of depreciation expenses, even though the total amount of depreciation charged might be different in each period. Understanding this fixed-rate aspect is key, as it distinguishes the double declining method from some other methods where rates or calculations might vary annually or include market value considerations.

Other options suggest changes in the rate or variability based on market conditions, which do not accurately represent how the double declining balance method operates.