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They are reclassifying the asset to "show that won't be aired", which I assume changes the depreciation regime and allows instant writeoff. (Depreciation, for
by Arnt 3y ago
They are reclassifying the asset to "show that won't be aired", which I assume changes the depreciation regime and allows instant writeoff.
(Depreciation, for those that don't know, governs how much of an asset is assumed to be lost each year. If you buy a computer, you spend e.g. $1000 and get an asset worth $1000, so there's no change to the value of the company on that day. The taxman will let you assume that in the second year it's worth ⅔ and in the third ⅓, and after that it's worthless (completely written off). Your accounting for the second year will show a loss of $333 for that computer, since it started the year being worth $1000 and ended it worth $667. This means that the loss of value of the computer allows you to earn $333 without having to pay tax, if you'll pardon the simplification.)