Write three paragraphs to answer the following: There are several methods to transfer the cost of a fixed asset to expense. Describe the GAAP methods to recognize depreciation on a long-term asset. Tax law differs from GAAP. Under tax law the government allows a business to expense a certain amount of a long-term assets in the year it is placed in service instead of taking a set amount per year. If you spent $25,000 for a machine, what would be the advantage of expensing it in the year of purchase? What would be the advantage of depreciating the asset $5,000 per year for 5 years?

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Fixed assets can either be intangible or tangible Intangible are longterm assets but do not have physical evidence For instance goodwill The latter ar... View the full answer