SYD is a traditional topic that is included in many accounting textbooks. But it is the most complex of the accelerated methods especially when partial years are involved. SYD is rarely used in today’s business world. Because of its complexity, it is even less frequently used in small businesses. SYD is seldom used for income tax purposes, because tax laws usually define allowable depreciation rates in terms of the declining-balance method. For these reasons, we defer coverage of the mechanics of this method to later accounting courses.
DECELERATED DEPRECIATION METHODS
Depreciation methods exist that recognize less depreciation expense in the early years of an asset’s useful life and more in the later years. Such methods may achieve a reasonable matching of depreciation expense and revenue when the plant asset is expected to become increasingly productive over time. Utility companies, for example, may use these methods for new power plants that will be more fully utilized as the population of the area increases.
These depreciation methods are rarely used: thus we defer coverage to later accounting courses