0
Why tax depreciation usually occur at a much faster rate than book depreciation?
Naidec
By allowing businesses to depreciate their assets faster, the government (IRS) provides an incentive for firms to replace their assets quicker. This in turn stimulates the economy as firms are spending on capital expenditures more often.
Wiki User
∙ 12y ago
Add your answer:
Earn +20 pts
What is book depreciation mean?
The depreciation rate for accounting may be different than that of taxation. The depreciation as per books of accounts may often be termed as book depreciation while that calculated under tax law is termed as tax depreciation.
What is the difference between tax depreciation and book depreciation?
Tax depreciation is the one done based on Tax rules, for example certain asset purchased from sep 2010 to nov 2010 is eligible for 100% depreciation.] Book depreciation is the one based on corporate law . Vehicles depreciated for seven years. The net book value is the one represented in financial statements. Tax man will adjust profits based on tax depreciation rules and revise tax accordingly.
Are Depreciation Expenses reported on the balance sheet as an addition to the related asset?
Depreciation or accumulated depreciation is deducted from related assets in balance sheet to show the net book value of asset.
The difference between the cost of an asset and the accumulated depreciation for that asset is called?
Book Value is the difference between the cost of an asset and the accumulated depreciation of that asset.
How is the net book value of a fixed asset is determined by?
Original cost less the accumulated depreciation
What is book depreciation mean?
The depreciation rate for accounting may be different than that of taxation. The depreciation as per books of accounts may often be termed as book depreciation while that calculated under tax law is termed as tax depreciation.
Why depreciation is charged on assets?
depreciation -- Decline in the value of a currency, financial asset, or capital good. When applied to a capital good, depreciation usually refers to loss of value because of obsolescence, wear, or destruction (as by fire or flood). Book depreciation (also known as tax depreciation) is the depreciation that the tax code allows businesses to deduct when they calculate their taxable profits. It is typically faster than economic depreciation, which represents the actual decline in the value of the asset. Both measures of depreciation appear as part of the national income and product accounts.another definition...depreciation -- Decrease in the value of equipment from wear and tear and the passage of time. Depreciation on business equipment is generally deductible for tax purposes.another definition...depreciation -- the decline in the dollar value of an asset over time and though use. The amount of annual depreciation may be computed differently for tax purposes than the actual decline in value.
What is book mean?
The depreciation rate for accounting may be different than that of taxation. The depreciation as per books of accounts may often be termed as book depreciation while that calculated under tax law is termed as tax depreciation.
What is the different between the cost of depreciation of a asset and its related accumulated depreciation?
Cost of depreciation assets and accumulated depreciation is same as accumulated depreciaton calculates how much depreciation is charged till date while remaining is current book value of assets.
What is the difference between tax depreciation and book depreciation?
Tax depreciation is the one done based on Tax rules, for example certain asset purchased from sep 2010 to nov 2010 is eligible for 100% depreciation.] Book depreciation is the one based on corporate law . Vehicles depreciated for seven years. The net book value is the one represented in financial statements. Tax man will adjust profits based on tax depreciation rules and revise tax accordingly.
How do you account difference between depreciation as book and depreciation as tax?
This will be found under "deferred taxes" on the income statement.
Are Depreciation Expenses reported on the balance sheet as an addition to the related asset?
Depreciation or accumulated depreciation is deducted from related assets in balance sheet to show the net book value of asset.
Is depreciation of sales facilities a fixed or variable expense when calculating contribution margin?
According to my text book, depreciation is a Fixed cost
What is the book value of a fixed asset?
The original cost of the item less accumulated depreciation for the item. And The gross book value is the original/historical price paid for an asset, without a depreciation deduction.
How is the net book value of a depreciable asset calculated?
The net book value of a depreciable asset is calculated by deducting the accumulated depreciation from the original cost of the asset. Accumulated depreciation is the total depreciation expense recorded over the life of the asset. This calculation allows for the determination of the asset's value at a specific point in time.
The difference between the cost of an asset and the accumulated depreciation for that asset is called?
Book Value is the difference between the cost of an asset and the accumulated depreciation of that asset.
How are accumulated depreciation and depreciation expenses similar?
Accumulated depreciation is all of the depreciation ever 'accumulated' against the assets currently in service. It is shown on the balance sheet as a 'contra' (negative) asset, directly below the assets it relates to. Depreciation expense is the current period's depreciation of the assets currently in service. It is shown on the income (P&L) statement as an expense. Example: Business purchased a truck for $20,000 which will last 5 years. For simplicity, we'll use 'straight-line' depreciation. End of Year One: Depreciation expense on Income Statement $4,000 (1/5th of $20,000) Accumulated Depreciation on balance sheet: $4,000 End of Year Two: Depreciation expense on Income Statement $4,000 Accumulated Depreciation on balance sheet: $8,000 (both years) End of Year Three: Depreciation expense on Income Statement $4,000 Accumulated Depreciation on balance sheet: $12,000 (all three years)
