April 11, 2008
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Is it acceptable for companies to use two methods of depreciation?
Yes, many companies use two or more methods of depreciation.
It is acceptable and common for companies to depreciate its plant assets by using the straight line method on its financial statements, while using an accelerated method on its income tax return.
A company could also be depreciating its equipment over ten years for its financial statements, while using seven years for its income tax return.
Even the depreciation for financial statements could consist of some assets being depreciated using the units of production or units of activity method, while other assets are depreciated using the straight line method.
Learn more about Depreciation.
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5 Responses to “Is it acceptable for companies to use two methods of depreciation?”
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Right on the money. No pun intended…
Sir,
I have got very informative information from these Q&A
Thanks,
Junaid Khan.
thank you nery much for your good helpfull
how many methods of depreciation exists(straight line, wdv,annuity,sinking fund, hrs method, etc) i need to know more about it
can a company change the method of dep in course of time of asset?