Accelerated depreciation methods allocate greater amounts of depreciation expense to an asset's early years of useful life and thus provides an investment incentive to businesses to take this non-cash deduction and reduce current period income taxes.

Question

Quizplus · Accepted Answer

Accelerated depreciation methods such as double-declining balance or sum-of-years-digits allocate greater amounts of depreciation expense to an asset's early years of useful life. This reduces taxable income in those early years and provides an investment incentive to businesses to take advantage of the non-cash deduction and reduce current period income taxes.

Accelerated Depreciation Methods Allocate Greater Amounts of Depreciation Expense to an Asset's