method recognizing higher amounts of depreciation in the earlier years and lower amounts in the later years of a fixed asset's life. Some machines, for example, are more efficient early on and generate greater service potential; matching dictates higher depreciation expense in those years. Over time, depreciation expense moves in a downward direction and maintenance costs tend to become higher; thus the effect of accelerated depreciation is fairly even charges to income. Greatest tax benefits from depreciation are enjoyed in the earlier years.
accounting method of reducing the book value of an asset at a higher rate than comparable methods in the early years of ownership. Since 1981, the most common form of accelerated depreciation is the accelerated cost recovery system (ACRS), which later was modified by the tax reform act of 1986 Previous methods of accelerated depreciation included the declining balance method and the sum-of-the-years digits method.
any one of a number of allowed methods of calculating depreciation that permit greater amounts of deductions in earlier years than are permitted under the straight-line method, which assumes equal depreciation during each year of the asset's life.
depreciation methods that allow faster write-offs than straight-line rates in earlier periods of the useful life of an asset. For example, in the first few years of recovery, MACRS allows a 200% depreciation methods that allow faster write-offs than straight-line rates in earlier periods of the useful life of an asset. For example, in the first few years of recovery, MACRS allows a 200% Double-Declining-Balancewrite-off, which is twice the rate of straight-line depreciation. Depreciable assets other than buildings fall into 3-, 5-, 7-, 10-, 15-, or 20-year recovery periods under the general depreciation system.
method in which larger amounts of depreciation are taken in the beginning years of the life of an asset and smaller amounts in later years. The objective is to defer taxes legally, thereby allowing funds to be retained by a business to finance growth.
depreciation methods, chosen for income tax or accounting purposes, that offer greater deductions in early years.
