Accelerated Appreciation Definition

Insurance & Business Definitions for "Accelerated Depreciation"

Accelerated Depreciation in Accounting - A method of being able to recognize higher depreciation in early years and lower amounts in later years of an asset's life. For example, an automobile would lose a greater amount of value at the beginning of its life than at the end. Over time the depreciation expenses of the asset would go down and maintenance expenses would go up. Tax benefits from depreciation would be higher upfront.

Accelerated Depreciation in Investment, Finance, and Securities - Accelerated depreciation methods would allow higher write-offs at the beginning of an asset's life and lower write-offs at the end of an asset's life compared to standard depreciation rates.

Accelerated Depreciation in Insurance - A method by which higher amounts of depreciation are recognized at the beginning of the life of an asset and lower amounts are recognized towards the end of the asset's lifecycle. Generally the goal of accelerated depreciation is to legally defer taxes for the purpose of financing growth.

Accelerated Depreciation in Banking - Accelerated depreciation is a method of account in which the book value of an asset is reduced at a greater upfront rate compared to the rate at which it is reduced in later years. The most common form of this today is in the accelerated cost recovery system, as governed by the Internal Revenue Code and MACRS.

Accelerated depreciation is a common concept in law, finance, business, and insurance.

What does the term "Accelerated Depreciation" mean?

This glossary is provided as a service by CPMI for life and health insurance licensing, property and casualty insurance licensing, and insurance continuing education.

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