Current Approach
For Example:
- Assume an asset is being depreciated presently on the books using straight-line and on the tax return using double-declining balance.
- Assume the firm wishes to change from straight-line on the books to double-declining balance on the books.
- To the beginning of the current year the following amounts have been depreciated:
Information:
Straight-line: $80,000
Double-declining balance: $120,000
Tax rate for all items is 30%