NSC | Asset Depreciation > How Declining Balance Works

Accelerated depreciation methods are accounting techniques that allocate a larger portion of an asset’s cost to depreciation expense in the early years of its useful life, with gradually decreasing amounts recognized in later years. These methods are often considered to better reflect the economic reality of how certain assets are used, especially those that are most efficient, productive, or valuable when they are new. The rationale behind accelerated depreciation is that many assets contribute more significantly to a company’s operations in the beginning of their lifespan, and therefore, it is appropriate to match higher depreciation expenses to those early periods.