Diminishing balance depreciation, also known as the double-declining balance method, is an accelerated depreciation method used to allocate the cost of a fixed asset over its useful life. It involves calculating the depreciation by applying a fixed percentage (usually double the straight-line rate) to the book value of the asset at the beginning of each accounting period. The book value decreases each year as depreciation is charged, and the depreciation amount reduces accordingly. This method results in higher depreciation expenses in the early years and lower expenses in the later years of the asset's life. The process stops when the asset's book value equals its residual or salvage value.