Decomposing a relation into BCNF

Although the question is old, the other questions/answers don’t seem to provide a very clear step-by-step general answer on determining and decomposing relations to BCNF.

1. Determine BCNF:
For relation R to be in BCNF, all the functional dependencies (FDs) that hold in R need to satisfy property that the determinants X are all superkeys of R. i.e. if X->Y holds in R, then X must be a superkey of R to be in BCNF.

In your case, it can be shown that the only candidate key (minimal superkey) is ACE. Thus both FDs: A->B and C->D are violating BCNF as both A and C are not superkeys or R.

2. Decompose R into BCNF form:
If R is not in BCNF, we decompose R into a set of relations S that are in BCNF.
This can be accomplished with a very simple algorithm:

Initialize S = {R}
While S has a relation R' that is not in BCNF do:   
   Pick a FD: X->Y that holds in R' and violates BCNF
   Add the relation XY to S
   Update R' = R'-Y
Return S

In your case, the iterative steps are as follows:

S = {ABCDE}       // Intialization S = {R}
S = {ACDE, AB}    // Pick FD: A->B which violates BCNF
S = {ACE, AB, CD} // Pick FD: C->D which violates BCNF
// Return S as all relations are in BCNF

Thus, R(A,B,C,D,E) is decomposed into a set of relations: R1(A,C,E), R2(A,B) and R3(C,D) that satisfies BCNF.

Note also that in this case, functional dependency is preserved but normalization to BCNF does not guarantee this.