When calculating depreciation, early payment discounts usually don't have a direct impact on the depreciation expense itself.
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When calculating depreciation, early payment discounts usually don't have a direct impact on the depreciation expense itself. However, they can influence the cost of the asset. If a company receives an early payment discount when purchasing an asset, the cost of the asset would be lower. This lower cost would then be spread out over the asset's useful life to calculate depreciation expense. So while the discount doesn't directly affect depreciation, it indirectly affects the cost basis used in depreciation calculations.
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Understanding Business Ethics
ISBN: 9781506303239
3rd Edition
Authors: Peter A. Stanwick, Sarah D. Stanwick
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