Total lifetime depreciation amounts on equipment for both financial reporting and tax reporting are the same, only the timing may differ.

Question

Quizplus · Accepted Answer

For both financial reporting and tax purposes, the total amount of depreciation taken over the life of an asset will be the same; however, the timing and method of depreciation can differ, leading to temporary differences in the amount of depreciation expense recognized each year.

Total Lifetime Depreciation Amounts on Equipment for Both Financial Reporting