Many businesses make use of various different assets that each contributes to the business in some way. But there is an important consideration business must factor in when looking at any asset, and that is its inevitable rising or falling value.
A business that sells cars will have to take note of which cars are the most valuable, which are the least and which are rising or falling in value. These changes in value are always happening and can be taken advantage of in certain circumstances.
If the cost of an asset is allocated in a much faster manner, with more of the cost being allocated at the beginning of the increase and less at the end. The total amount of depreciation remains the same, but the rate at which it takes place is different.
This is known as accelerated depreciation and is often used as a way to spread the cost of an asset that a business owns. This can be a valuable tool when it comes to dealing with the inevitable changes of rising and falling asset value.