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?