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Sum of Years Digits places a higher depreciation value at the ront end of an asset letting you deduct that from your taxes early on. For a new company this is extremely useful because you save more on taxes during the first, most critical years. During the latter part of this process the depreciation amounts will be less which means you will pay more taxes. In the end the same amount is paid, so it all depends when you need the most money.

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Distinguish between depreciation policy and the concept of depreciation?

Depreciation policy is management thing that what depreciation method to use and how much depreciation to charge to each asset. Depreciation concepts are concepts which govern the depreciation process which management cannot change they are universal rules to follow depreciation that how straight line depreciation work etc.


Which method of depreciation would you use if you were to receive a bonus which is based on net profit?

which method of depreciation to use when bonus is received that is based on net profit


What is an advantage and disadvantage of units of production depreciation?

Advantages: Easy to use Matches Cost to revenues (Matching Concept) Disadvantages: Depreciation can not be charged when the Asset is not in use.


Which depreciation method does not use residual value in calculating the first years depreciation expense?

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Do you have to use the same depreciation for accounting and tax?

Tax department has developed theire own depreciation schedules for different assets class and use their own depreciations rather than using accounting depreciation and due to this accounting depreciation difference there is also difference in tax we pay and tax we calculate and called "Deffered Taxation"


What is the entry to record depreciation expense?

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What depreciation method does wal-mart use?

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What depreciation method does target use?

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What method of depreciation does Target Corp use on their financial statements?

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How does one use a car depreciation calculator?

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