# A change from the straight-line method of depreciation to an accelerated method is accounted for as

A depreciation method in which an asset loses book value at a faster (accelerated) rate than traditional depreciation methods

Accelerated depreciation is a depreciation method in which a capital asset reduces its book value at a faster (accelerated) rate than it would using traditional depreciation methods such as the straight-line method. Therefore, under accelerated depreciation, an asset faces greater deductions in its value in the earlier years than in the later years. Accelerated depreciation is often used as a tax-reduction strategy.

The most popular accelerated depreciation methods are the double declining balance method and the sum of the years’ digits method. The formula for calculating depreciation using each of these methods is given below:

#### 1. Double declining balance method:

Double declining balance = 2 x Straight-line depreciation rate x Book value at the beginning of the year

#### 2. Sum of the years’ digits method:

Applicable percentage (%) = Number of years of estimated life remaining at the beginning of the year / SYD

Where:

SYD = n(n+1) / 2

• SYD stands for sum of the years’ digit
• n = number of years

### Example of the Double Declining Balance Method

CFI Company purchases a machine for \$100,000, with an estimated salvage value of \$10,000 and a useful life of 5 years. The straight-line depreciation rate is 20%.

The double declining balance depreciation method calculation is:

### Example of the Sum of the Years’ Digits Method

CFI Company purchases a machine for \$100,000 with an estimated salvage value of \$10,000 and a useful life of 5 years. The straight-line depreciation rate is 20%.

The sum of the years’ digits method calculation is:

### Comparing the Accelerated Depreciation Methods with the Traditional Straight-Line Method

Let us calculate the straight-line depreciation for the same example – a machine worth \$100,000, with an estimated salvage value of \$10,000 and a useful life of 5 years – and compare it to the accelerated methods of depreciation.

A table with the depreciation amounts each year for each method:

A table with the end of year book values for each method:

Under all three methods, the total depreciation and book value at the end of the machine’s useful life is the same – \$90,000 in total depreciation and \$10,000 in ending book, or salvage, value.

### Financial Statement Impact of Different Depreciation Methods

Note from the tables above that the amount of depreciation in each year is different under varying methods. With the accelerated methods of depreciation (double declining and sum of the years’ digits), there is greater depreciation in the earlier years, as compared to the straight-line depreciation method. So, how do the accelerated methods of depreciation affect an asset’s value and the company’s net income?

The amount of depreciation of an asset affects the reported profits of a company (through the income statement). Therefore, the accelerated methods of depreciation skew the profits of the company and reveal lower profit in the earlier years of the asset’s acquisition. As the asset comes closer to the end of its useful life, it faces less annual depreciation, with the net effect of the company realizing a higher reported profit in those later years.

For example, consider a company that generates yearly revenues of \$100,000. For simplicity, assume that the only operating expense of the company is depreciation expense (no rent expense, wage expense, etc.). Notice the difference in operating income under an accelerated method of depreciation compared to a straight-line depreciation method:

As illustrated in the table above, an accelerated depreciation method results in lower reported profit in earlier years but higher profit in later years as compared to a traditional straight-line depreciation method.

### Tax Savings and Net Present Value

Companies often use rapid depreciation methods to reduce taxes in the early years of an asset’s life. It’s important to note that total tax deductions over the life of an asset will be the same no matter what method is used. The only benefit of an accelerated method is the timing of the deductions.

Rapid methods offer more tax savings in the early years and fewer savings in later years. Since managers of businesses take the Time Value of Money into consideration, it’s better to have the savings early rather than later. It helps to improve the Net Present Value of the business.

The most common method of depreciation used on a company's financial statements is the straight-line method. When the straight-line method is used each full year's depreciation expense will be the same amount.

We will illustrate the details of depreciation, and specifically the straight-line depreciation method, with the following example.

### Example of Straight-Line Depreciation

A company has decided that it wants to use the straight-line method for reporting depreciation on its financial statements. The company purchased equipment for use in its business operation and provides the following information:

• On July 1, 2020, the company purchased equipment for \$10,500

• The account Equipment was debited for \$10,500 and the account Cash was credited for \$10,500

• The company estimated that the equipment's salvage value at the end of its useful life will be \$500

• The company estimated that the equipment's useful life will be 5 years

Given the above information, the straight-line depreciation expense for each full year that the asset is used will be \$2,000 as calculated here:

If a company's accounting year ends on December 31, the company's income statement will report the depreciation expense as follows:

*Since the asset was acquired on July 1, 2020, only half of the annual depreciation expense amount is recorded in 2020 and 2025.

The company's cash payment for the equipment took place on a single day in 2020 as shown here:

Since depreciation expense is reported in all years from 2020 through 2025, but the cash payment took place only at the time when the equipment was purchased, each year's depreciation expense is often described as a noncash expense.

### Recording Straight-Line Depreciation

Depreciation is recorded in the company's accounting records through adjusting entries. Adjusting entries are recorded in the general journal using the last day of the accounting period.

Assuming the company prepares only annual financial statements for its years that end on December 31, the adjusting entries will be as follows:

If a company issues monthly financial statements, the amount of each monthly adjusting entry will be \$166.67.

### Visualizing the Balances in Equipment and Accumulated Depreciation

Note that the account credited in the above adjusting entries is not the asset account Equipment. Instead, the credit is entered in the contra asset account Accumulated Depreciation. The use of this contra account allows the asset account Equipment to continue to report the equipment's cost, while also reporting in Accumulated Depreciation the total amount of depreciation expense that has been reported since the asset was acquired.

To assist in visualizing the balances in the asset account Equipment and the related contra asset account Accumulated Depreciation as of December 31, 2021 we are providing the following T-accounts:

### Book Value or Carrying Value of Assets

The combination of an asset account's debit balance and its related contra asset account's credit balance is the asset's book value or carrying value.

Using the account balances in the T-accounts above, the book value or carrying value of the company's equipment as of December 31, 2021 is:

When the asset's book value is equal to the asset's estimated salvage value, the depreciation entries will stop. If the asset continues in use, there will be \$0 depreciation expense in each of the subsequent years. The asset's cost and its accumulated depreciation balance will remain in the general ledger accounts until the asset is disposed of.

### Depreciation is Based on Estimates

It is important to realize that the amount of depreciation reported by a company is an estimated amount. The reason is that the calculation of depreciation uses the following estimates:

• Salvage value
An asset's salvage value is also described as the asset's disposal value, scrap value or residual value. Salvage value is an estimate of the amount the company expects to receive when it disposes of the asset at the end of the asset's useful life. (It is common for companies to assume that an asset will have no salvage value.)

• Useful life
The useful life of an asset is an estimate of how long the asset is expected to be used in the business. For example, a design engineer might purchase a new computer and estimate that the computer will be useful in the business for only 2 years (due to rapid advances in software and hardware). At the same time, an accountant might purchase a similar computer and estimate that it will be useful in the accounting business for 4 years. Both the design engineer's estimated useful life of 2 years and the accountant's estimated useful life of 4 years are correct (even though the computers are similar and may have a physical life of more than 10 years).

### What Happens When an Estimated Amount Changes

For financial statements to be relevant for their users, the financial statements must be distributed soon after the accounting period ends. To achieve this requirement, accountants must estimate some amounts.

After the financial statements are distributed, it is reasonable to learn that some actual amounts are different from the estimated amounts that were included in the financial statements. Unless the differences are significant no action is required.

If there is a significant change in an asset's estimated salvage value and/or the asset's estimated useful life, the change in the estimate will result in a new amount of depreciation expense in the current accounting year and in the remaining years of the asset's useful life.

NOTE:
A change in the estimated salvage value or a change in the estimated useful life of an asset that is being depreciated is not considered to be an accounting error. As a result, the financial statements that have already been distributed are not changed.

A significant change in the estimated salvage value or estimated useful life will be reported in the current and remaining accounting years of the asset's useful life.

### Example of a Change in the Estimated Useful Life of an Asset

To illustrate a change in the estimated useful life of an asset, we will assume a company had the following situation:

• Equipment was purchased on January 1, 2016 at a cost of \$14,000

• The company originally estimated the equipment will have no salvage value

• The company originally estimated that the equipment's useful life was 7 years

• Straight-line depreciation was used (resulting in depreciation of \$2,000 in each full year)

• In 2020 the company realized that the equipment would not be useful after December 31, 2021 (instead of December 31, 2022)

• The estimated salvage value at the end of the equipment's useful life remains at \$0

• Instead of the original useful life of 7 years (January 1, 2016 through December 31, 2022), the company now estimates a total useful life of only 6 years (January 1, 2016 through December 31, 2021)

• The depreciation already reported for the years 2016 through 2019 cannot be changed since the change is not an accounting error

• The change in the estimated useful life will affect only the depreciation being reported for 2020 and 2021

Let's first review the original straight-line depreciation using the estimates in January 2016:

Note in the following T-accounts that on December 31, 2019, the balance in the Equipment account is \$14,000 (the cost of the equipment) and the account Accumulated Depreciation has a credit balance of \$8,000:

The above accounts indicate that the book value of the equipment as of December 31, 2019 is \$6,000 (\$14,000 – \$8,000). We also know that only two years remain (2020 and 2021) in which to depreciate the remaining \$6,000 of book value. Since, the estimated salvage value is \$0, the remaining \$6,000 is divided by the 2 years remaining = \$3,000 of depreciation expense in each of the years 2020 and 2021.

The adjusting entries for 2020 and 2021 are as follows:

As of December 31, 2021, the Accumulated Depreciation account will look like this:

Note that the depreciation amounts recorded in the years 2019 and before were not changed.

Now that you have learned the basic concepts of the depreciation reported on a company's financial statement, we will move on to calculate depreciation using three additional depreciation methods:

• Units-of-activity (or units of production)
• Double-declining-balance
• Sum-of-the-years'-digits

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In most depreciation methods, an asset's estimated useful life is expressed in years. However, in the units-of-activity method (and in the similar units-of-production method), an asset's estimated useful life is expressed in units of output. In the units-of-activity method, the accounting period's depreciation expense is not a function of the passage of time. Instead, each accounting period's depreciation expense is based on the asset's usage during the accounting period.

### Examples of Units-of-Activity Depreciation

To introduce the concept of the units-of-activity method, let's assume that a service business purchases unique equipment at a cost of \$20,000. Over the equipment's useful life, the business estimates that the equipment will produce 5,000 valuable items. Assuming there is no salvage value for the equipment, the business will report \$4 (\$20,000/5,000 items) of depreciation expense for each item produced. If 80 items were produced during the first month of the equipment's use, the depreciation expense for the month will be \$320 (80 items X \$4). If in the next month only 10 items are produced by the equipment, only \$40 (10 items X \$4) of depreciation will be reported.

Now let's illustrate the units-of-activity method of depreciation by using a different example:

• On July 1, 2020, the company paid \$10,500 to purchase special equipment to produce elaborate images for its clients

• The company estimated that this equipment will have a useful life of 5,000 images

• The company estimated that the equipment will be sold for \$500 at the end of its useful life

Using the above information, the calculation of the units-of-activity method of depreciation begins with the following:

Over the life of the equipment, the maximum total amount of depreciation expense is \$10,000. However, the amount of depreciation expense in any year depends on the number of images. Whether it's a partial year or a full year is not relevant.

The depreciation expense for any accounting period is calculated by multiplying the number of images produced times \$2 per image. For instance, if 400 images are produced from July 1 through December 31, 2020, the depreciation for 2020 will be recorded as follows:

If 900 images are produced in the year 2021, the depreciation entry for 2021 will be recorded as follows:

In this example, the depreciation will continue until the credit balance in Accumulated Depreciation reaches \$10,000 (the equipment's depreciable cost). If the equipment continues to be used, no further depreciation expense will be reported. The account balances remain in the general ledger until the equipment is sold, scrapped, etc.

## Double-Declining-Balance (DDB) Depreciation

### DDB is an Accelerated Method of Depreciation

The double-declining-balance (DDB) method, which is also referred to as the 200%-declining-balance method, is one of the accelerated methods of depreciation. DDB is an accelerated method because more depreciation expense is reported in the early years of an asset's useful life and less depreciation expense in the later years.

The "double" or "200%" means two times straight-line rate of depreciation. For instance, if an asset's estimated useful life is 10 years, the straight-line rate of depreciation is 10% (100% divided by 10 years) per year. Therefore, the "double" or "200%" will mean a depreciation rate of 20% per year.

The "declining-balance" refers to the asset's book value or carrying value (the asset's cost minus its accumulated depreciation). Recall that the asset's book value declines each time that depreciation is credited to the related contra asset account Accumulated Depreciation.

Therefore, the DDB depreciation calculation for an asset with a 10-year useful life will have a DDB depreciation rate of 20%. In the first accounting year that the asset is used, the 20% will be multiplied times the asset's cost since there is no accumulated depreciation. In the following accounting years, the 20% is multiplied times the asset's book value at the beginning of the accounting year. This differs from other depreciation methods where an asset's depreciable cost is used.

In DDB depreciation the asset's estimated salvage value is initially ignored in the calculations. However, the depreciation will stop when the asset's book value is equal to the estimated salvage value.

NOTE:
Although accelerated depreciation methods may more accurately coincide with the way some assets lose value, companies are reluctant to have their income statements show less net income and earnings per share than is required. As a result, companies are not interested in reporting larger depreciation expense in the early years of their assets' lives (and lower depreciation in future years).

However, when it comes to taxable income and the related income tax payments, it is a different story. In the U.S. companies are permitted to use straight-line depreciation on their income statements while using accelerated depreciation on their income tax returns. You can find more information on depreciation for income tax reporting at www.IRS.gov.

### Example of Double-Declining-Balance Depreciation

To illustrate the double-declining-balance method of depreciation, we will use the following information:

• A retailer purchased fixtures on January 1 at a cost of \$100,000

• The estimated useful life is 10 years (resulting in a straight-line depreciation rate of 10%)

• The DDB rate will be 20% (200% or double the straight-line rate of 10%)

• The estimated salvage value at the end of its useful life is \$8,000

Below is a table showing the first four years of the DDB depreciation:

Note that the estimated salvage value of \$8,000 was not considered in calculating each year's depreciation expense. In our example, the depreciation expense will continue until the amount in Accumulated Depreciation reaches a credit balance of \$92,000 (cost of \$100,000 minus \$8,000 of salvage value).

[In practice, companies often assume \$0 salvage value and will switch from DDB to straight-line depreciation towards the end of the asset's useful life in order to fully depreciate the asset's cost.]

## Sum-of-the-Years'-Digits (SYD) Depreciation

### SYD is An Accelerated Method of Depreciation

The sum-of-the-years'-digits (SYD) depreciation method is also another form of accelerated depreciation since it results in more depreciation expense in the early years of the asset's useful life and less in the later years (as compared to the straight-line method).

The "sum-of-the-years'-digits" refers to adding the digits in the years of an asset's useful life. For example, if an asset has a useful life of 5 years, the sum of the digits 1 through 5 is equal to 15 (1 + 2 + 3 + 4 + 5).

An asset with a useful life of 10 years will have the following sum of its years' digits:

1 + 2 + 3 + 4 + 5 + 6 + 7 + 8 + 9 + 10 = 55

A fast way to compute the sum of the digits in the asset's useful life is to use this formula: n(n+1) divided by 2. If an asset's useful life is 10 years, then n = 10. The sum of the digits for an asset with a useful life of 10 years = 10(10+1)/2 = 10(11)/2 = 110/2 = 55.

In the case of an asset with a 10-year useful life, the depreciation expense in the first full year of the asset's life will be 10/55 times the asset's depreciable cost. The depreciation for the 2nd year will be 9/55 times the asset's depreciable cost. This pattern will continue and the depreciation for the 10th year will be 1/55 times the asset's depreciable cost.

### Example of Sum-of-the-Years'-Digits Depreciation

Now we will use the following information to calculate the SYD depreciation:

• A retailer purchased fixtures on January 1 at a cost of \$115,000

• The estimated useful life is 10 years

• The estimated salvage value at the end of its useful life is \$5,000

• The depreciable cost of the fixtures is \$110,000 (cost of \$115,000 minus the estimated salvage value of \$5,000)

The depreciation amounts for the first five years of the asset's 10-year life under SYD depreciation method are:

1st year: 10/55 times \$110,000 = \$20,000
2nd year: 9/55 times \$110,000 = \$18,000
3rd year: 8/55 times \$110,000 = \$16,000
4th year: 7/55 times \$110,000 = \$14,000
5th year: 6/55 times \$110,000 = \$12,000
6th year: 5/55 times \$110,000 = \$10,000
7th year: 4/55 times \$110,000 = \$8,000
8th year: 3/55 times \$110,000 = \$6,000
9th year: 2/55 times \$110,000 = \$4,000
10th year: 1/55 times \$110,000 = \$2,000

At the end of 10 years, the contra asset account Accumulated Depreciation will have a credit balance of \$110,000. When this is combined with the debit balance of \$115,000 in the asset account Fixtures, the book value of the fixtures will be \$5,000 (which is equal to the estimated salvage value).

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When a depreciable asset is sold (as opposed to traded-in or exchanged for another asset), a gain or loss on the sale is likely. However, before computing the gain or loss, it is necessary to record the asset's depreciation right up to the moment of the sale.

To amplify this step, assume that a retailer had recorded depreciation on its fleet of delivery trucks up to December 31. Three weeks later (on January 21), the company sells one of its older delivery trucks. The first step for the retailer is to record the depreciation for the three weeks that the truck was used in January.

### Example of a Gain on Sale of an Asset

After an asset's depreciation is recorded up to the date the asset is sold, the asset's book value is compared to the amount received. For example, if an old delivery truck is sold and its cost was \$80,000 and its accumulated depreciation at the date of the sale is \$72,000, the truck's book value at the date of the sale is \$8,000.

If the retailer receives cash of \$10,000 for the truck, the retailer will increase its asset cash and will remove from its assets, the truck's book value of \$8,000. Hence, the retailer has a gain of \$2,000. This transaction will be recorded as follows:

### Example of a Loss on Sale of an Asset

Now let's assume that the retailer sells the truck for \$5,000 (instead of \$8,000). The retailer's cash will increase by \$5,000 and its property, plant, and equipment section of the balance sheet will decrease by the book value of \$8,000. As a result, the retailer will have a loss of \$3,000. This transaction will be recorded as follows:

## Other Information Regarding Depreciable Assets

### Depreciation of Manufacturing Assets

Assuming a retailer, distributor, or service provider does not manufacture goods, the depreciation associated with its assets will be recorded and reported on its income statement as depreciation expense.

However, if a company's depreciable assets are used in a manufacturing process, the depreciation of the manufacturing assets will not be reported directly on the income statement as depreciation expense. Instead, this depreciation will be initially recorded as part of manufacturing overhead, which is then allocated (assigned) to the goods that were manufactured.

In other words, the depreciation on the manufacturing facilities and equipment will be attached to the products manufactured. When the goods are in inventory, some of the depreciation is part of the cost of the goods reported as the asset inventory. When the goods are sold, some of the depreciation will move from the asset inventory to the cost of goods sold that is reported on the manufacturer's income statement.

The depreciation on the non-manufacturing assets (these are assets used in the company's selling, general and administrative activities) will be reported directly as depreciation expense on the manufacturer's income statements.

### Repairs and Maintenance Vs. Capital Expenditures

After a company's asset has been put into service, there will likely be some future expenditures associated with the asset. If an expenditure merely maintains the asset (routine and preventative maintenance, tune ups, etc.), the expenditure is immediately reported as an expense such as Repairs and Maintenance Expense. Similarly, if a huge expenditure merely repairs a broken machine, the amount is reported as an expense such as Repairs and Maintenance Expense.

On the other hand, if an expenditure expands or improves an asset's capabilities, the amount is not reported as an expense. Rather, the cost of the addition or improvement is recorded as an asset and should be depreciated over the remaining useful life of the asset.

The amounts spent to acquire, expand, or improve assets are referred to as capital expenditures. The amount that a company spent on capital expenditures during the accounting period is reported under investing activities on the company's statement of cash flows.

### Depreciation: Allocation Not Valuation

It is important to understand that the main purpose of depreciation is to move the cost of an asset (except the estimated salvage value) from a company's balance sheet to depreciation expense on its income statements in a systematic manner during the asset's useful life.

Hence, it is important to understand that depreciation is a process of allocating an asset's cost to expense over the asset's useful life. The purpose of depreciation is not to report the asset's fair market value on the company's balance sheets.

NOTE:
The purpose of depreciation is to allocate an asset's cost to expense in a systematic manner.
The purpose of depreciation is not to report an asset's current value on the company's balance sheets.

### Impairment of Assets Used in a Business

Since depreciation is not intended to report a depreciable asset's market value, it is possible that the asset's market value is significantly less than the asset's book value or carrying amount. The accounting profession has addressed this situation with a mechanism to reduce the asset's book value and to report the adjustment as an impairment loss.

There are several steps involved in determining whether an impairment loss has occurred and how to measure and report it. You can learn more about impairment losses by reading the appropriate parts of an Intermediate Accounting textbook or visiting the Financial Accounting Standards Board's website.

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I was looking out for an online accounting course after a gap of 25 years. Luckily, I came across AccountingCoach. The very first visit to this site made me feel very comfortable. I felt as though it was made just for me. Very soon I enrolled myself as a PRO member. Now that I am able to access the entire site like the seminars, exams, crosswords and many many more interesting ways to learn accounting, my knowledge in accounting has deepened. I can confidently say to people who are new to this field, or who are trying for a refresher course like me, this is THE WEBSITE for you. It's a well-structured program, the most difficult accounting concepts have been explained in a very crystal clear fashion with beautiful real-life examples. Thanks to Mr Harold Averkamp and his dedicated team for sharing their deep insight.
-Sunita P.

The PRO membership is great ROI. For those who are looking to learn accounting, this is one of greatest accounting courses you'll ever find online.
-Karam T.

AccountingCoach helps me tremendously. I always find-up-to date the financial and accounting information needed. As I move into the next phase of my work life and career, AccountingCoach PRO will be an essential tool as I move from employee to business owner. Thank you for this very valuable tool which continues to evolve and grow.
-Diane J.

Thank you for being my reference book as I complete my accounting degree. I had no experience in accounting or bookkeeping before completing this degree and understandably I was in over my head! All the way over in New Zealand I came across your website, subscribed, hoping I may learn even a couple of things and have ended up using your website as my main reference tool. The quizzes, question and answer pages, the entire website is so user friendly and I know it will see me through to the completion of my degree. I can't thank you enough, please keep up the fantastic work!!!
-K.H.

I own a bookkeeping and tax business and I use AccountingCoach to train my bookkeepers. The value far exceeds the cost!
-Wendi

I currently teach Bookkeeping at one of the colleges in New York City. Being a member of AccountingCoach PRO has helped me tremendously. There is always something new to learn and teach. The price is very affordable. I have always encouraged my students to join the site. I'm glad to say that some have and they have really benefited from what AccountingCoach PRO has to offer.
-Marcia S.

I have been a member of AccountingCoach for many years now. I value the content and the easy-to-grasp manner in which the material is always explained. Many times I read the material here before studying it in my accounting book. I love AccountingCoach! They are very honorable as well. My membership continues to be valid after all these years. If I email them with questions about my membership or password or whatever else, they are always prompt to assist. I wish I had been a student of the founder of the site. He must have been a really wonderful professor!!! Thanks for putting all the work to create and maintain the site. You guys are the best!!
-Licia B.

Thank you AccountingCoach, you have helped me over the last 8 years of study and guided me to my dream job of becoming an accountant. I've answered and explained all the hard questions that I needed to get me where I am today and I certainly couldn't have done it without you! I will continue to use AccountingCoach PRO for the rest of my career. You are the best.
-Gillian L.

AccountingCoach PRO membership has assisted me in keeping my accounting and bookkeeping skills sharp over the years. My bookkeeping business has benefited greatly. The membership pricing is very reasonable and the information is easy to understand and apply. It has helped me explain difficult accounting concepts to many of my clients.
-Manch K.

AccountingCoach helped me during the times I had trouble remembering accounting concepts. It is a very useful website encompassing a broad area of accounting and finance. Definitely the best go-to place for accountants like me. Thank you so much!
-Cynthia A.

As a European I studied the accounting system used in my particular country. I always wondered how accounting was done in the U.S. AccountingCoach has taught me everything I wanted to know. I've learned a lot about the terminology and the differences between accounting methods from the other side of the pond.
-Pedro R.

I strongly believe that AccountingCoach is the best education program from a practical accounting point of view. Every tool like the accounting dictionary, crossword puzzles, word scrambles (I love it!) and so on explains difficult technical words with the most proper and simplest words Visual learning programs and Q&A archives are especially effective for non-native English speakers to understand current and practical usage methods of accounting terms.
-Ishino K.

-Leonard L.

I am so impressed by AccountingCoach. I happened to stumble upon it when I was checking for an explanation on impairment. Ever since then my life has become uncomplicated and all these accounting books thrown out the window. It truly is the best! I could not believe it? I run my own accounting, bookkeeping practice and I am still today amazed about the way they have simplified things! I love it! Job well done to the team at AccountingCoach! I am your biggest fan! Thanks so much.
-Eleanor M.

I am a Granny of 67 years old, a South African National, studying for an undergraduate degree in Accounting. Coming across AccountingCoach was the best gift I ever received throughout my education pursuits. AccountingCoach is pleasantly user-friendly and a great study tool for senior citizens and those who study part time because of their busy work schedules. Even South African University students who are presently facing funding challenges in South Africa can use AccountingCoach as a study tool. Thank you.
-Jane N.

I am an experienced businessman now semi-retired and I guest lecture to senior managers in major UK companies and at academic institutions including some internationally famous business schools on topics such as Business Performance Measurement; Business Decision-Taking; and Assessing and Managing Risk. Although I understand business finance well, I never trained as an accountant. But to maintain high credibility when delivering my courses I need to be aware of and keep up to date with certain key international accounting standards and current accounting definitions and practices. I have found AccountingCoach to be an excellent way to do this and fantastic value for money.
-Ray O.

I am a small business accountant and tax preparer. A lot of my clients are do-it-yourself bookkeepers for their small business. Most of them, if not all, use bookkeeping software to keep track of their business. Although software programs are great at what they do and are "easy" for the user, the double entry accounting method is still occurring in the background. Accounting concepts and terms are not "easily" explained to a small business owner who doesn't understand why reports look the way they do. To help them, I always direct them to AccountingCoach to learn the concepts and terms. The tutorials, glossary, and web topics are presented in the best way that anyone can understand accounting. It's the best source on the web!
-Kathleen F.

Just want to let you know that I have learned so much from AccountingCoach PRO. I have had so many issues resolved simply by referring to AccountingCoach PRO when it comes to doing my everyday bookkeeping work. I am so glad that I discovered you and look forward to referring to this website a lot in the future...keep up the great work.
-Peggy M.

I teach Accounting and this is the first website I give my students. I too, purchased the lifetime membership because it is a valuable resource for them and for anyone desiring to learn and understand Accounting. I even do the crossword puzzles, word scrambles, etc. to keep my skills sharp! Plus, it's fun! It's a challenge to keep my lectures interesting, and AccountingCoach helps tremendously. Thanks!
-Crystal C.

I love, love, love your website, it has helped me to succeed in all the bookkeeping I have done off and on throughout the years. Whenever I had doubts I could easily access the website and find my answers quick and I love the videos. Very educational, accurate and reliable. The lifetime unlimited access was one of the best investments I have ever made a few years ago! Makes learning fun and I would suggest this to others in a heartbeat, business owners, employees won't be disappointed. Even those who do occasional bookkeeping will definitely be satisfied with any membership purchase. Thank you AccountingCoach for all that you have helped me with!!! Amazing site!!
-Brenda L.

I am not an accountant, nor a bookkeeper, but I need to be aware of what's happening financially. Being able to consult AccountingCoach on a specific topic relating to our books has been a tremendous help to me. I very much appreciate your service!
-Brian P.

I don't have enough words to express how great the AccountingCoach is. I have been using it since the first day I became a member and it's incredibly good.
-Manny S.

AccountingCoach assisted me with training my team on the profit and loss statements. It helped me put the 'why' behind the terminology used. I would highly recommend AccountingCoach as a good resource for all levels of users!
-Carolyn C.

AccountingCoach has helped me a lot with my work as a manager. It has given me confidence in reading and looking at spreadsheets and budgets as well as giving me the tools to interpret our financial status and forecast future expectations at my work. A great idea to have it readily available for all of us managers and professionals that need to brush up on their accounting knowledge or learn to enhance their professional standings and job status. Thank you for the videos and cheat sheets, as I appreciate a great effort on your part to all of us that need to learn and revise their accounting and finance information and knowledge.
-Samih B.

I bought a small Accounting, Bookkeeping & Payroll business and had very little knowledge of accounting principles and felt I was way over my head. I was looking online for free training or help with just the basics. After a few website that did not help, I found AccountingCoach and signed up and it has helped me a great deal! I am not sure if my business would be as successful if I did not pick up the lessons so easily. AccountingCoach really makes learning easy and interesting, which is hard to do when it comes to accounting. I have recommended it to friends & family and I will continue to do so. Thank you AccountingCoach!!!
-Jennifer L.

As a high school accounting teacher I have used the resources on AccountingCoach PRO to enhance my understanding of accounting concepts and make my explanation of concepts clearer for my students. I recommend AccountingCoach PRO to students pursuing higher level accounting after high school and to anyone teaching accounting classes---the money spent on this resource will be one of the best investments in professional development you'll make in your career.
-Sharon M.

The PRO membership allows me to provide great explanations to my coworkers who are not versed in accounting without me spending a lot of time finding examples they may understand. I use my membership to review topics that I don't use very often and it has been one of the best investments I've made for my work and it costs less than my Accounting textbook!
-John B.

AccountingCoach has helped tremendously while I was studying for accounting and I strongly believe that my grade would not have been in the 90's had it not been for the AccountingCoach. I will always keep the AccountingCoach in my favourites list even though I have completed my courses as I will no doubt make reference to it when I second-guess myself. It has helped with all aspects of accounting from the very beginning to the very end. Whomever decided to create AccountingCoach was a genius because it is designed in a way that anyone from an amateur to a PRO can follow along. I recommend it to everyone. It has become my new limb. Cannot boast enough about it. Well worth it.
-Tammy

Becoming a member of AccountingCoach was hands down a great decision for me. I have been in bookkeeping for over 16 years and all the training I had was from the CPA that I worked for. While I felt I had a good foundation and years of experience, once I took the leap and branched out with my own bookkeeping practice I felt the need to brush up on my skills. AccountingCoach actually not only helped me brush up on my knowledge, but has helped me pinpoint my strengths and weaknesses which allowed me to focus on those areas that I was lacking knowledge. It was also a great boost to see how much knowledge I already had. I think it was a great investment and I love knowing that when I second-guess myself I can easily log in and review the information needed. Worth every penny!
-Judith G.

Thank you AccountingCoach! As an auditor, I frequently encounter government and private financial transactions that I vaguely remember from my college years. The information and ease of finding the right accounting procedures to those instances has been an enormous help to me in my job. This has definitely been a good decision to be a member.
-Enrique E.

I came across AccountingCoach some years ago and since then it has been my go-to solution for all and any problems or issues that arise in my day-to-day work. Whenever I come across a situation I have not faced before I sign in, read up on the related data, of which there is plenty, and solve another problem. I think of AccountingCoach as my personal library where I can look up information on any aspect of my business. My clients are always impressed with the results I provide. Thank you AccountingCoach.
-Joseph C.

I started using AccountingCoach when I found myself unemployed and looking to brush up on my cost accounting skills. It was a wonderful tool and I found it easy to use and contained all the information I would need to get familiar with the topic, all while not having to go back to my college books or my CPA review materials. It is affordably priced and well worth investing in. I am now employed and the materials I studied helped me to prepare for questions I received in the interview process regarding topics I needed to brush up on.
-Karen B.

In my roles as a business owner, member of senior management teams and as a business consultant, I frequently deal with accounting-related issues. While I have a solid grasp of a wide range of accounting practices and methods, I still find that there are times when I want to refresh or investigate aspects of accounting that I either seldom visit or have not had the opportunity to work with. When those circumstances arise, I turn to AccountingCoach which I find covers not only a wide range of topics but usually in enough depth and detail that you can use it almost like a condensed primer on any given topic. The information and examples are complete enough that I find I can apply what is shown to the task at hand and have the result be equal to what I would get from an accounting professional. It is not an exaggeration to state that it has saved both time and cost on numerous occasions. Highly recommended!
-James F.

Living in a small tourist rural town, there are limited choices in the job market. I knew if I bumped up my skills, I would become eligible for a bookkeeping position locally. AccountingCoach has helped me do that. Such a small investment for a HUGE return. Thank you so much for making this available!
-Pam P.

I would like to say thank you very much for your support. I am a student of Accounting at George Mason University in Virginia. I found your website some time ago, and I have been a PRO member ever since. From the moment I found AccountingCoach, I recognize the value, quality and effort of your work. Currently, I am taking Financial Accounting. I confess I was scared because it has been awhile since I took accounting classes. Thankfully, AccountingCoach helps me to not just refresh my mind on basic accounting terminology, but also helps me to understand new terminology in plain English.
-Desire S.

I found AccountingCoach online about 2 years ago. It has helped me tremendously to brush up on knowledge and information about accounting that I don't have time to go to school for. I have been an accountant for many years and don't plan on going back to college at this point; I have a Bachelor’s degree already. I use AccountingCoach to study for a job in accounting if I am not familiar with the work or to understand something like cash flow statements when prepping for a job interview. Recently, I used the online exams extensively to study for a city accounting job; with great success. Thank you Harold!
-Mary B.

I have been using AccountingCoach in my bookkeeping business for a few years now and love it! There are times when I need an answer to some accounting situation that baffles me and always have been able to find the answers I need on your website. I particularly like the clear and concise way the material is presented so I can quickly get results.
-Cheryl N..

I enrolled in an accounting course online. I was sent textbooks and a workbook in the mail and that was it. I was on my own to figure out the rest. It was difficult trying to match the course and workbook together to do the lessons and exercises and the explanations left too many gaps and questions. I knew I needed extra support. I stumbled upon AccountingCoach in an internet search and from the little I was able to read, I gained a far better understanding than the college-level textbook I had been studying for months. I signed up for PRO and it got even better. I'm able to do more exercises and gain extra studying tools and more detailed explanations to ensure my understanding of the accounting process. Truthfully, I've learned more through the AccountingCoach Pro than the college textbook and it cost sooo much less! It has been a life saver. I don't think I could have continued without it. Thank you for creating such an amazing experience and giving me the confidence I needed to keep working towards my goal.
-Crystal C.

AccountingCoach is a simply fantastic self-learning source. The way it explains various accounting concepts in such a simple and self explanatory manner is really commendable. Being an engineering student, with no past accounting background, AccountingCoach has been a great saviour in my MBA accounting module. The Balance Sheets, Statement of Cash Flows, and Income Statement all have been explained very beautifully. Thank you AccountingCoach. Keep up the good work.
-Amber A.