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The American Heritage Dictionary of Business Terms » excess depreciation
excess depreciation
excess depreciation definition - business
excess depreciation
The amount by which accumulated depreciation using an accelerated method exceeds accumulated depreciation using the straight-line method. The excess occurs when a firm uses accelerated depreciation for tax purposes (additional depreciation expense results in lower taxes) and straight-line depreciation for financial reporting purposes. Excess depreciation results in ordinary income when an asset is sold.
The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.
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