The Effects Of Asset Modeling And Tax Depreciation On Companies Future Cash Flows
Authors: Ngu Kanti Hedris, Atanga Desmond Funwie. Paper Title:
The Effects Of Asset Modeling And Tax Depreciation On Companies Future Cash Flows.
IQ Research Journal of IQ res. j. (2023)2(9): pp 01-06. Vol. 002, Issue 09 09-2023, pp.0592-0598
The ultimate goal of this article is to model how governments in many jurisdictions grant concessions to companies by increasing their tax basis, thereby depleting taxable
income. These thereby allow companies to use tax basis rather than accounting depreciation to decrease taxes. The main takeaway from this article is that, because
these tax depreciation numbers are higher, it means that the tax basis is getting driven
down quicker than the PPE balance. In fact, the whole reason that the ending PPE
balance value is higher than the ending tax basis value is because the tax basis has been driven down over time by virtue of the fact that these tax depreciation numbers have been higher in recent years.