We can't ask accountants to recalculate each asset's present value every time incomeis calculated, but we can ask them to match book depreciation schedules to typical patterns of economic depreciation.

When tax depreciation exceeds book depreciation in the early years of property life, deferred taxes are charged to expense with acontra credit to a liability account.

Book depreciation is depreciation in a company's internal financial records that is different fromthe amount that is used for taxes.