This preview shows page 1. Sign up to view the full content.
Unformatted text preview: amounts following every report, until the last repot which would zero out the depreciation. Both methods would involve the same amount of money, just taken in a different manner. The methods used are dependent on the reasons, material, and in many (most cases), the tax benefits involved. Most companies I have seen use the straight line method of depreciation for tax purposes, as this gives them a larger write-off in the later years. Some do use the accelerated method as the write off is greater in the beginning and they may acquire more assets to depreciate later for the same tax benefit. There are times when the asset being depreciated is the deciding factor in the method used. A taxicab for example, is often depreciated using the accelerated method as the book value of the vehicle drops every year, as does the actual value of the vehicle. In addition you also have the maintenance costs to off set the lower depreciation every year....
View Full Document
- Spring '09