Generally accepted accounting principles and the Internal Revenue Code of tax law require that the same depreciation method be used for both the financial statements and the federal tax return.

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Generally Accepted Accounting Principles (GAAP) and the Internal Revenue Code (IRC) often allow for different depreciation methods for financial reporting and tax purposes, respectively. For financial statements, companies may use methods that match the expense with the revenue it generates, while for tax purposes, they might choose methods that accelerate depreciation to defer taxes.

Generally Accepted Accounting Principles and the Internal Revenue Code of Tax