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accelerated depreciationa DEPRECIATION method which charges a higher proportion of the HISTORIC COST of an ASSET against profits during the early years of its life than is charged in the later years of its life, for example the reducing balance method of depreciation. It is often argued that an accelerated depreciation method is more appropriate since it levies higher depreciation charges in the early years of an asset's life when maintenance and repair charges are modest, while charging less for depreciation in the later years of the asset's life when maintenance and repair charges are higher.
Depreciation methods that allow larger deductions in early years,trailing off to smaller deductions in later years. It is the opposite of straight-line depreciation, in which equal amounts are depreciated every year.Accelerated depreciation is not allowed for real property, but may be employed for certain components,such as fencing,security systems,carpet,or windows. The most common types of accelerated depreciation encountered in real estate are double declining balance, also called 200 percent declining balance, and the alternative 150 percent declining balance method.
Example: Carpeting in residential rental properties may be depreciated over 5 years.
Assuming $10,000 worth of carpeting is installed in an apartment building, this is each year's depreciation using the different methods: