Understanding The Basics Of Accelerated Depreciation

When looking at accelerated depreciation always keep the name in mind. The word ‘accelerated’ refers to the rate that the cost of an asset moves at, which in this case is faster than usual. The word ‘depreciation’ means that cost is going down in relation to assets of similar value.

To look at it another way, the asset’s cost is allocated in a much faster manner, with more of the cost being allocated at the beginning and less at the end.  The total amount of depreciation remains the same, but the rate at which it takes place is different.

When it comes to accounting, accelerated depreciation is often used as a way to spread the cost of an asset that a business owns. This can be a valuable tool when it comes to dealing with the inevitable changes of rising and falling asset value.

Professional accountants can provide more detailed information, especially when it comes to understanding the specific depreciation rates of certain assets.