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    Depreciation for Tax and Reporting Purposes

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    What is the difference between the straight-line method of depreciation and the accelerated methods?

    Why do companies use different depreciation methods for tax reporting and financial reporting?

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    Solution Preview

    There are several examples of accelerated methods of depreciation including double declining (which results in about a 40% depreciation of an asset during the first year) and 50% accelerated depreciation (which for a five year MACRS asset results in a 60% depreciation being realized in the first ...

    Solution Summary

    The solution describes the reasons behind various depreciation methods and the difference between tax depreciation and reporting depreciation methodology.