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Is it acceptable for companies to use two methods of depreciation?

Author:
Harold Averkamp, CPA, MBA

Definition of Depreciation Methods

There are various methods of depreciating assets that are used in a business. It is acceptable and common for companies to use two or more of the methods of depreciation.

Examples of Using Two Methods of Depreciation

It is very common for a company to depreciate its plant assets by using straight-line depreciation on its financial statements, while using an accelerated method of depreciation on its income tax return.

A company could also be depreciating its equipment by using a useful life of 10 years for its financial statements, while using a useful life of 7 years for its income tax return.

Even the depreciation for a company’s 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.

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About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

Learn More About Harold

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