Differeniating Depreciation Methods

Differeniating Depreciation Methods - Name Georgia Moore...

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Name: Georgia Moore Date: 04/25/2011 Assignment: Differentiating Depreciation Methods 2.4 Discuss the difference between the straight-line method of depreciation and the accelerated methods. Why do companies use different depreciation methods for tax reporting and financial reporting? The difference between straight line method and accelerated method of depreciation is straight line is the one commonly used [The simplest and most commonly used depreciation method, straight line depreciation is calculated by taking the purchase or acquisition price of an asset subtracted by the salvage value divided by the total productive years the asset can be reasonably expected to benefit the company (called "useful life" in accounting jargon).] (The New York Times Company, 2011). With straight line method the charges are spread evenly over the useful life of the asset. Depreciation charged every year in this method is constant. This allows for a higher income smoothing where income has gradual change over useful life of the asset without
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Differeniating Depreciation Methods - Name Georgia Moore...

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