What is the depreciation rate calculated for the double declining method?

The double declining balance method of depreciation accelerates the depreciation expense, meaning more depreciation is recognized in the earlier years of an asset's life compared to the later years. To calculate the depreciation rate under this method, one starts with the asset's estimated useful life.

Using the formula for double declining balance depreciation, the correct approach is to first determine the straight-line depreciation rate, which is calculated as 1 divided by the estimated life of the asset. This rate is then doubled to arrive at the double declining balance rate.

Thus, the formula would be:

Depreciation Rate = (1 / Estimated Life) × 200%

This effectively doubles the customary straight-line depreciation rate, leading to the accelerated expense recognition typical of this method. Therefore, the correct answer reflects this calculation, confirming it as the appropriate method for determining the depreciation rate in the double declining balance method.