Digital depreciation
Digital depreciation is a business method for recording the depreciation of a good . It is a special case of the arithmeticdegressive depreciation . With this, the decrease in value decreases year after year by a constant amount. The special thing about digital depreciation is that this amount has to match the decrease in value in the last year.
The digital depreciation is calculated as follows:
 AB = depreciation basis = acquisition costs + incidental acquisition costs  residual value
 Depreciation amount for the last period of the depreciation period
 d = Annual reduction in the depreciation amount
 T = period
 t = period
example
A machine with a value of 15,000 is to be digitally written off over a period of 4 years. Incidental acquisition costs and residual value are zero.
Then d is calculated as follows:
d = 2 x 15,000 / (4 x (4 + 1)) = 30,000 / 20 = 1,500
However, this is only the depreciation amount for the last period. The depreciation amount of the previous periods increases by this amount and can be determined for periods 1–3 as follows:
 Period 1: (4  1 + 1) 1,500 = 6,000
 Period 2: (4  2 + 1) 1,500 = 4,500
 Period 3: (4  3 + 1) 1,500 = 3,000
The depreciation plan is then as follows:
period 
Depreciation amount 
Book value

t = 0 
15,000


t = 1  6,000 
9,000

t = 2  4,500 
4,500

t = 3  3,000 
1,500

t = 4  1,500 
0
