DECREASING CHARGE DEPRECIATION--A SEARCH FOR LOGIC.
Depreciation methods which, for a single asset or for a group, record relatively high charges during earlier periods of life. The adoption of such methods has, of course, been stimulated by their acceptance for income-tax purposes. Even though no over-all saving in tax may be expected, the fact that payment of tax money may be significantly deferred is sufficient basis in many cases for adoption of one of the declining charges methods for tax purposes. One has already been treated to an abundance of literature on the special problem raised where depreciation is taken more rapidly for tax purposes than for general accounting purposes. Thus far it has been argued that where a depreciable asset is subject to a deterioration factor it is more appropriate to use a form of declining-charges depreciation than it is to use the traditional straight-line procedure. It will next be argued that straight-line procedure is inappropriate even if the asset in question has a deterioration factor of zero, that is, even where the asset continues to produce the same level of service, physical or economic, in each period throughout its entire life.
- DOI
- 10.2308/tar-7063027
- Volume
- 35 (4)
- Pages
- 590-597
- Language
- en
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- BibTeX
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