Appraising Alternative Methods of Accounting for Accelerated tax Depreciation: A Relative-Accuracy Approach.

The article examines the deferral method using a criterion of earnings and rate-of-return accuracy. The author states that the deferred method of accounting for the problem of accelerated tax depreciation has come under considerable attack because it results in a deferral account which grows in amount with the growth in a firm's rate of spending on depreciable assets. He explains that when one puts the controversy between the deferred method and the nondeferral or flow through method in a new perspective he finds that the deferred method and the accelerated method has considerable merit as a crude way of accounting for assets with declining per-period benefit flows.