Depreciation of Fixed Assets Blue Haulage Ltd prepares its final accounts to 31 December each year - Leaving Cert Accounting - Question 2 - 2013

A company might choose one method of depreciation over another based on factors such as:

1. Financial reporting objectives – Different methods can yield different profit figures in the short term.
2. Tax implications – Some methods allow for quicker expense recognition, impacting tax liabilities.
3. Asset usage patterns – If an asset is expected to lose value more quickly in its early years, an accelerated depreciation method could be advantageous.
4. Managerial preferences – Management might prefer methods that support long-term strategic goals in financial planning.