accelerated depreciation

Definition

Technique of computing depreciation at a rate that is faster than the rate of straight line depreciation. Two main methods employed in accelerated depreciation are (1) Declining balance depreciation and (2) Sum of the years' digits depreciation. Both these methods write off larger proportion of an asset's value in the early years of its life than in the later years. The justification for accelerated depreciation is that an asset is more valuable, and has more earning potential, in early years of its useful life. In later years the asset becomes less valuable due to its inevitable obsolescence, and deterioration due to wear and tear. Accelerated depreciation, however, changes only the timing of depreciation; the total depreciation amount chargeable on the asset remains the same.