Which depreciation method records more depreciation expense in the early years of the asset's life?

Which depreciation method records more depreciation expense in the early years of the asset's life?

• A. Straight-line depreciation
• B. Accelerated depreciation
• C. Units of production depreciation
• D. Market value depreciation

Answer: (B)

Depreciation methods differ in how quickly they recognize an asset’s cost over time. Accelerated depreciation front-loads expense, taking a larger portion in the early years and smaller amounts later. This means early-year depreciation is higher with accelerated methods than with other methods. Straight-line spreads the same amount each year, so it doesn’t front-load. Units of production bases depreciation on actual usage, which can be high early if the asset is heavily used, but it varies with output rather than following a fixed early-heavy pattern. Market value depreciation isn’t a standard method used for routine depreciation. So, when asked which method records more depreciation in the early years, accelerated depreciation is the best answer because it is designed to recognize more of the asset’s cost upfront.

Depreciation methods differ in how quickly they recognize an asset’s cost over time. Accelerated depreciation front-loads expense, taking a larger portion in the early years and smaller amounts later. This means early-year depreciation is higher with accelerated methods than with other methods. Straight-line spreads the same amount each year, so it doesn’t front-load. Units of production bases depreciation on actual usage, which can be high early if the asset is heavily used, but it varies with output rather than following a fixed early-heavy pattern. Market value depreciation isn’t a standard method used for routine depreciation.

So, when asked which method records more depreciation in the early years, accelerated depreciation is the best answer because it is designed to recognize more of the asset’s cost upfront.