Accelerated Depreciation


DEFINITION of 'Accelerated Depreciation'

Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years of the life of an asset.

BREAKING DOWN 'Accelerated Depreciation'

The straight-line depreciation method spreads the cost evenly over the life of an asset. On the other hand, a method of accelerated depreciation like the double declining balance (DDB) allows you to deduct far more in the first years after purchase.

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  1. What would cause a decrease in accumulated depreciation?

    When a company's accumulated depreciation decreases, it is normally due to the sale of a long-term fixed asset or group of ... Read Full Answer >>
  2. What are the different ways to calculate depreciation?

    In the United States, accountants have to follow generally accepted accounting principles (GAAP) to calculate and report ... Read Full Answer >>
  3. What is the best method of calculating depreciation for tax reporting purposes?

    Depreciation offers businesses a way to recover the cost of an eligible asset by writing off the expense over the course ... Read Full Answer >>
  4. How do I read and analyze an income statement?

    The income statement, also known as the profit and loss (P&L) statement, is the financial statement that depicts the ... Read Full Answer >>
  5. Do dividends affect working capital?

    Regardless of whether cash dividends are paid or accrued, a company's working capital is reduced. When cash dividends are ... Read Full Answer >>
  6. Do prepayments provide working capital?

    Prepayments, or prepaid expenses, are typically included in the current assets on a company's balance sheet, as they represent ... Read Full Answer >>

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