Does the straight line depreciation method and the double declining balance depreciation method produce the same book value each year?

No. The choice of depreciation method has an impact on net asset value and taxation. A simplistic example follows for a generic corporation:

* The company has a fixed asset that cost $1,000, has a useful life of 5 years and no salvage value

* Corporate earnings before interest, taxes, depreciation and amortization (EBITDA) is $500 which is represented in a cash asset

* The company does not have any debt, interest expense or interest income

* The company does not generate/lose cash flow from financing or investing

For the first year, the following key metrics are noted for the company

Item Using Straight-Line Using Double-Declining

EBITDA $500 $500

Depreciation ($200) ($400)

EBT/PBT $300 $100

Taxes at 40% ($120) ($40)

PROFIT $180 $60

EBIT $300 $100

+ Depreciation $200 $400

- Taxes ($120) ($40)

CASH FLOW FROM OPS $380 $460

Non-Cash Net Assets $800 $600

Cash $380 $460

TOTAL NET ASSETS $1,180 $1,060

So, in the first year, the book value of the business is higher by using straight line depreciation.

The following results are summarized for all five years of useful life:

Item Using Straight-Line Using Double-Declining

BOOK VALUE yr 1 $1,180 $1,060

yr2 $1,360 $1,216

yr3 $1,540 $1,430

yr4 $1,720 $1,678

yr5 $1,900 $1,900

So to summarize, the different techniques produce different book values on a year-to-year basis, however, by the end of the useful life of the asset, the book values are the same. All things being equal, if one earns interest on the cash balances, the double-declining method produces a higher book value by the end of the useful life of the asset.