MCL380

Special Topics in Mechanical Engineering

3-0-0

Sanjeev Jain (III 255, Ph : 1060, sanjeevj@iitd.ac.in)

Course Overview
• Accelerated Depreciation

2
ACCELERATED DEPRECIATION

 Allocation of plant asset’s cost in a faster manner than straight

line depreciation.
 More depreciation in earlier years of an asset’s life.
 Less depreciation in later years.
 Difference is in timing of depreciation.
(total amount of depreciation will be the same )
e.g. Double declining balance ( 200 % declining )

 Tax laws allow business property to be depreciated.

 Decreases by certain amount each year.
 Decrease is treated as tax deductable loss.
 Tax credit given for certain renewable energy system.

3
 Straight line depreciation =

where PWF is present worth factor

is number of years