What is the most widely used rate in the Double-Declining Balance method?

The most widely used rate in the Double-Declining Balance method is 200%. This method is an accelerated depreciation technique that allows for greater depreciation expenses in the earlier years of an asset's life, reflecting the more rapid decline in value that often occurs shortly after acquisition.

In this method, the annual depreciation expense is calculated by taking twice the straight-line depreciation rate and applying it to the asset's remaining book value at the beginning of each year. Hence, for a given asset with a useful life of 5 years, the straight-line rate would be 20% (100% divided by 5). By doubling that rate, we arrive at 200%, which maximizes the depreciation in the earlier stages.

The use of 200% instead of the other rates listed (100%, 150%, or 250%) is standard practice because it balances the need to reflect higher depreciation upfront while still adhering to generally accepted accounting principles. This creates a more realistic portrayal of asset value over time, aligning with how many tangible assets lose their utility and economic value.