What benefit you will have when you use Straight-line depreciation and reducing balance depreciation?

Question

What benefit you will have when you use Straight-line depreciation and reducing balance depreciation?

Answer 1

Straight line depreciation allows you to write off an asset evenly over the life of the asset and therefore allows a growing company the ability to increase their net income.  Increasing net income is not an advantage companies look for when dealing with tax authorities, so it is more beneficial to load the expense up front, decreasing the tax expense.  The argument is that declining balance depreciation more closely matches revenue and the economic value of the assets which typically have less resale value percentage wise when they are new.