Accelerated depreciation is any depreciation system that helps with accounting or taxation, enabling higher depreciation expenditure in the early years of any asset in its lifetime.
Accelerated depreciation is a system of depreciation which helps in accounting/income tax purposes. This enables higher depreciation-related expenditure in the early years of the lifetime of any asset. There are many such methods including DDB (double declining balance) and this means that there will be higher expenditure for depreciation in the first few years and lower costs with the ageing of the asset in question. This is not the same as a straight-line method of depreciation, which distributes costs throughout the lifetime of an asset and evenly at that.
Accelerated depreciation is a mechanism for asset depreciation, which equates to lowering expenditure/value. Accelerated depreciation is highly beneficial for investors in real estate/property who have higher initial expenses, while residual value is lower. This is because the amount that is coming under depreciation is usually higher in the first few years of the property ownership duration. Accelerated depreciation will help gain tax savings for investors in real estate and the owners of commercial buildings/properties as well.
