Compare accounting depreciation and tax depreciation.

The major differences between accounting depreciation and tax depreciation are as follows −

Accounting depreciation

• It is prepared for accounting purpose.

• It is based on International Accounting Standards Board (IASB) and accounting principles.

• One can choose any depreciation method.

• It is more accurate as compared to tax depreciation.

Tax depreciation

• It is prepared for income tax purpose.

• It is based on Internal Revenue service (IRS) regulations.

• It uses accelerated depreciation method.

• It is less accurate as compared to accounting depreciation.

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Published on 25-Jul-2020 06:57:13