Fixed Asset Accountant Mock Interview

Master 30 Fixed Asset Accountant interview questions covering depreciation, capitalization policies, and reconciliations.

Question 30 of 30

What is the Sum-of-the-Years Digits Method of depreciation and what is the reasoning for using the method, as opposed to standard depreciation?

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Brian Schuchart

Brian Schuchart is a CPA and Senior Finance Business Partner. His professional experience includes senior management roles with NBC Sports, Virtual Health, and the Children's Hospital of Philadephia.

The Sum-of-the-Years Digits (SYD) is an accelerated method for calculating depreciation. In most cases, assets are depreciated evenly over the useful life of the asset. However, SYD allocates the highest depreciation expense in the first year and the lowest in the last year. The reasoning is that an asset is most useful in the first years of its useful life. Picture the purchase of a new car, where the value drops quickest in the first year or two of ownership.

Brian Schuchart

Brian Schuchart is a CPA and Senior Finance Business Partner. His professional experience includes senior management roles with NBC Sports, Virtual Health, and the Children's Hospital of Philadephia.

"The Sum-of-the-Years Digits Method is an accelerated method of recognizing depreciation expense on an asset. Under this method, the highest depreciation expense is recognized in the first year, and the lowest in the last year. The reasoning for using the Sum-of-Years method is that the fixed asset is most useful (and therefore most valuable) in the early years of its useful life. The value then diminishes over time."

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