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Differentiating Depreciation Methods
Kim Cressionnie
ACC/230
October 19, 2012
Brenna Wright

Differentiating Depreciation Methods
There are different methods to look-alike depreciation; you can physical exertion the straight identify method, deepen method, or units of production method (Fraser & Ormiston, 2007). In the conclusion it pull up stakes all even out to the same add up of depreciation at the end of the assets life.
refined line depreciation is the easiest method to occasion and the majority of companies use the straight line method (Fraser & Ormiston, 2007). Straight line depreciation simply means that you will calculate to use the same a ascend of depreciation every year passim the useful life of the asset.
Accelerated depreciation is where an asset is depreciated at a higher amount in the early long time of its useful life and at a lower mount in the later long time of its useful life. Using the intensify depreciation method the company is able to shell a longger tax savings in the early years of the asset.
When it comes to tax describe some companies may want to denigrate income tax, in this case they will have to make an history decision that will minimize net income, which in yield will minimize tax payments.



As for financial reporting a company may want to show the big picture of a firms profits or else of a companys lowest net profit.
The avail of using the straight line method is that it is easy to calculate, provided the flip side to this is that when this is calculated there is no friendship put in to at what rate the asset will actually depreciate in value.
The advantage of using the intensify method is that it reduces the taxable income and the taxes owed during the early years, but this method is labored to calculate to get it completely correct.

Reference
Fraser, L. M., & Ormiston, A. (2007). Understanding monetary Statements (8th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall.



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