Declining balance depreciation is an accounting method used to allocate the cost of an asset over its useful life. This method calculates depreciation based on a fixed percentage of the asset's remaining book value each year, leading to higher depreciation expenses in the earlier years and lower expenses as the asset ages. This approach is often used for assets like machinery or vehicles, where the value decreases more rapidly in the initial years. By using declining balance depreciation, businesses can better match their expenses with the revenue generated from the asset, providing a more accurate financial picture.