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Definition of Accelerated depreciation
Any depreciation method that produces larger deductions for depreciation in the
(1) The estimated useful life of the fixed asset being depreciated is
Any of several methods that recognize an increased amount
Method of accelerated depreciation.
The practice of reporting to shareholders using straight-line depreciation and
Method of accelerated depreciation.
An accelerated depreciation method that calculates depreciation each year by applying a fixed rate to the asset’s book (cost–accumulated depreciation) value. depreciation stops when the asset’s book value reaches its salvage value.
An accelerated depreciation method that makes the sum of the digits in an asset’s expected
This depreciation method allocates a uniform
Schedule of depreciation rates allowed for tax purposes.
A non-cash expense that provides a source of free cash flow. Amount allocated during the
The value of the tax write-off on depreciation of plant and equipment.
An equal dollar amount of depreciation in each accounting period.
A technique by which a company recovers the high cost of its plant-and-equipment assets gradually during the number of years they’ll be used in the business. depreciation can be physical, technological, or both.
A depreciation method created by the IRS under the Tax Reform Act of 1986. Companies must use it to depreciate all plant and equipment assets installed after December 31, 1986 (for tax purposes).
A depreciation method that depreciates an asset the same amount for each year of its estimated
An expense that spreads the cost of an asset over its useful life.
The operating profit before deducting interest, tax, depreciation and amortization.
A contra-fixed asset account representing the portion of the cost of a fixed asset that has been previously charged to expense. Each fixed asset account will have its own associated accumulated depreciation account.
An expense account that represents the portion of the cost of an asset that is being charged to expense during the current period.
A contra, or offset, account that is coupled
Refers to the generally accepted accounting principle of allocating
tax benefit (of depreciation)
the amount of depreciation deductible for tax purposes multiplied by the tax rate;
tax shield (of depreciation)
the amount of depreciation deductible
Reduction in value of fixed or tangible assets over some period
The sum total of all deprecation expense recognized to date
Both the decline in value of an asset over time, as well as the gradual
depreciation tax shield
Reduction in taxes attributable to the depreciation allowance.
Modified Accelerated Cost Recovery System (MACRS)
depreciation method that allows higher tax deductions in early years and lower deductions later.
Constant depreciation for each year of the asset’s accounting life.
a) Of capital stock: decline in the value of capital due to its wearing out or becoming obsolete.
Tax deductions that businesses can claim when they spend money on investment goods.
The systematic and rational allocation of the cost of property, plant, and equipment
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
An earningsbased measure that, for many, serves as a surrogate for cash flow. Actually consists of working
EBDDT - Earnings before depreciation and deferred taxes
This measure is used principally by
Amortization of fixed assets, such as plant and equipment, so as to allocate the cost over their depreciable life.
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