Depreciation (here we go ) reduces taxable income. If one believes
that the cost of a piece of equipment should be tax deductible in the year purchased, then accelerated depreciation does not sound like a gift from the government. If one believes that cost should be written off over the useful life of the asset, then an accelerated write-off creates value if simply from the time value of money, or if one feels strongly that tax rates will be going down in the future, or if one is growing enough that companies can time new capital investment to bring benefit as it reaches the back half of the schedule on the previous one.
I AM MAKING NO VALUE JUDGEMENT. Moreover. The ability to use tax benefits from capital investment is a material part of every capital investment decision I have seen.
|
(
In response to this post by BocaHoo91)
Posted: 12/13/2017 at 3:38PM