Accelerated Depreciation

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Sinking Fund Method

    A technique for depreciating an asset in bookkeeping records ...
  2. Fully Depreciated Asset

    A property, plant, or piece of equipment which, for accounting ...
  3. Half-Year Convention For Depreciation

    A depreciation schedule that treats all property acquired during ...
  4. Depreciation

    1. A method of allocating the cost of a tangible asset over its ...
  5. Accounting

    The systematic and comprehensive recording of financial transactions ...
  6. Asset

    1. A resource with economic value that an individual, corporation ...
Related Articles
  1. Active Trading

    An Introduction To Depreciation

    Companies make choices and assumptions in calculating depreciation, and you need to know how these affect the bottom line.
  2. Forex Education

    Depreciation: Straight-Line Vs. Double-Declining Methods

    Appreciate the different methods used to describe how book value is "used up".
  3. Options & Futures

    Advanced Financial Statement Analysis

    Learn what it means to do your homework on a company's performance and reporting practices before investing.
  4. Fundamental Analysis

    What is the difference between operating cash flow and net income?

    Learn how net income is an income statement for a certain period of time, while cash flow shows inflows and outflows based on conversion of sales into cash.
  5. Fundamental Analysis

    How do I calculate dividend payout ratio from a balance sheet?

    Understand what the dividend payout ratio indicates and learn how it can be calculated using the figures from a company's balance sheet statement.
  6. Credit & Loans

    When is it necessary to get a letter of credit?

    Capitalize on assets and negate risks by using a letter of credit. Letters of credit are often requested for buying, selling or trading.
  7. Fundamental Analysis

    Can entities other than banks issue letters of credit?

    Obtaining a letter of credit from a non-bank is legally acceptable according to the ICC, but companies tend to prefer to receive them from banks.
  8. Investing Basics

    What is the difference between a fixed asset and a current asset?

    Discover the difference between fixed assets and current assets and the value of each to a company. Learn the category and where to record each asset.
  9. Fundamental Analysis

    Why should fundamental investors pay attention to Cash Value Added (CVA)?

    Take a deeper look at cash value added, a metric used by fundamental investors to assess the ability of a company to meet cash flow obligations.
  10. Investing Basics

    What is the difference between tangible and intangible assets?

    Discover the difference between tangible assets and intangible assets and the types of assets that are in each. Additionally, learn where these are recorded.

You May Also Like

Hot Definitions
  1. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  2. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  3. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  4. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  5. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  6. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
Trading Center