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Why does the federal government allow for accelerated depreciation o

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Why does the federal government allow for accelerated
depreciation of fixed assets even when the useful life and
utility of the assets clearly align more to straight-line
depreciation? Explain.
Solution
ANSWER:
Accelerated depreciation allows companies to write off
their assets faster in earlier years than the straight-line
depreciation method and to write off a smaller amount in
the later years. The major benefit of using this method is
the tax shield it provides. Companies with a large tax
burden might like to use the accelerated-depreciation
method, even if it reduces the income shown on the
financial statement.
This depreciation method is popular for writing off
equipment that might be replaced before the end of its
useful life since the equipment might be obsolete (e.g.
computers).
Companies that have used accelerated depreciation will

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Why does the federal government allow for accelerated depreciation of fixed assets even when the useful life and utility of the assets clearly align more to straight -line depreciation? Explain. Solution ANSWER: Accelerated depreciation allows companies to write off their assets faster in earlier years than the straight -line depreciation method and to write off a smaller amount in the later years. The major benefit of using this method is the tax shield it provides. Companies with a large tax burden might like to use the accelerated -depreciation method, even if it reduces the income shown ...
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