accelerated depreciation -- the method of speeding up the write-off from income of qualifying investments at a faster than normal rate. Annual tax deductions are higher in the first years and diminish in later years of the write-off.
accelerated depreciation -- Rules of depreciation permitted by the IRS for fixed assets that served a purpose before 1980, when the Accelerated Cost Recovery System (ACRS) became obligatory. These rules, which include double-declining balance method and sum-of-yearsf digits method, allowed for quicker cost recovery and prompter tax benefits than are possible under customary straight-line depreciation.
accelerated depreciation - Accelerated depreciation refers to any one of several methods by which a company, for 'financial accounting' and / or tax purposes, depreciates a fixed asset in such a way that the amount of depreciation taken each year is higher during the earlier years of an assetfs life. For financial accounting purposes, accelerated depreciation is generally used when an asset is expected to be much more productive during its early years, so that depreciation expense will more accurately represent how much of an assetfs usefulness is being used up each year. For tax purposes, accelerated depreciation provides a way of deferring corporate income taxes by reducing taxable income in current years, in exchange for increased taxable income in future years.
For financial reporting purposes, the two most popular methods of accelerated depreciation are the declining balance method and the sum-of-the-yearsf digits method. For tax purposes, the allowable methods of accelerated depreciation depend on the tax law that the taxpayer is subject to. In the United States, the two currently allowable depreciation methods for tax purposes are both accelerated depreciation methods (ACRS and MACRS).
About the author
Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".
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