Accelerated Method of Depreciation

See Also:
Depreciation
Straight Line Depreciation
Amortization
Fixed Assets – NonCurrent Assets
Balance Sheet Projections

Accelerated Method of Depreciation Definition

An accelerated method of depreciation definition 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. Furthermore, 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. At the same time, the straight-line method spreads the cost evenly in throughout the asset’s life.

Accelerated Method of Depreciation Examples

Examples of accelerated methods of depreciation include the following:

• Double-declining-balance method
• Sum-of-the-years’-digits method
• Modified accelerated cost recovery system (MACRS)

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Originally written by James Wilkinson on July 23, 2013