Accelerated Method of Depreciation Definition
An accelerated method of depreciation is any depreciation method that expenses the cost of a tangible asset over its useful life at a rate faster than the straight-line method of depreciation. These methods are generally used to take into account greater deductions that are made over the first few years of an asset. In addition, it is used to minimize taxable income. This is different from the straight-line method because it adds greater depreciation over the first years of an asset, whilst the straight-line method spreads the cost evenly in throughout the asset’s life.
Accelerated Method of Depreciation Examples
- Double-declining-balance method
- Sum-of-the-years’-digits method
- Modified accelerated cost recovery system (MACRS)
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