what is accelerated depreciation 
accelerated depreciation is any method of depreciation used for accounting or income tax purposes that allows greater depreciation expenses in the early years of the life of an asset accelerated depreciation methods such as double declining balance ddb mean there will be higher depreciation expenses in the first few years and lower expenses as the asset ages this is unlike the straight line depreciation method which spreads the cost evenly over the life of an asset understanding accelerated depreciationaccelerated depreciation methods tend to align the recognized rate of an asset s depreciation with its actual use although this isn t technically required this alignment tends to occur because an asset is most heavily used when it s new functional and most efficient because this tends to occur at the beginning of the asset s life the rationale behind an accelerated method of depreciation is that it appropriately matches how the underlying asset is used as an asset ages it is not used as heavily since it is slowly phased out for newer assets special considerationsusing an accelerated depreciation method has financial reporting implications because depreciation is accelerated expenses are higher in earlier periods than in later periods companies may utilize this strategy for taxation purposes as an accelerated depreciation method will result in a deferment of tax liabilities since income is lower in earlier periods alternatively public companies tend to shy away from accelerated depreciation methods as net income is reduced in the short term types of accelerated depreciation methodsthe double declining balance ddb method is an accelerated depreciation method after taking the reciprocal of the useful life of the asset and doubling it this rate is applied to the depreciable base also known as the book value for the remainder of the asset s expected life for example an asset with a useful life of five years would have a reciprocal value of 1 5 or 20 double the rate or 40 is applied to the asset s current book value for depreciation although the rate remains constant the dollar value will decrease over time because the rate is multiplied by a smaller depreciable base each period the sum of the years digits syd method also allows for accelerated depreciation to start combine all the digits of the expected life of the asset for example an asset with a five year life would have a base of the sum of the digits one through five or 1 2 3 4 5 15 in the first depreciation year 5 15 of the depreciable base would be depreciated in the second year only 4 15 of the depreciable base would be depreciated this continues until year five depreciates the remaining 1 15 of the base 