Analysis of Fixed Asset Depreciation Method Selection Based on Corporate Income Tax: A Case Study of Company S

Abstract

The issue of fixed asset depreciation is of significant concern to corporate managers, accounting professionals, and accounting standard-setting bodies. On one hand, fixed assets represent a substantial portion of financial statements, and their depreciation significantly impacts the book value of assets and net profit. On the other hand, the choice of depreciation methods largely depends on accounting estimates and the professional judgment of accountants, which provides room for earnings management and profit manipulation. Given the substantial proportion of fixed assets in enterprises and the considerable impact of depreciation on profits, ensuring the quality of fixed asset depreciation information is crucial for the interests of all stakeholders. This paper examines the effects of various fixed asset depreciation methods on enterprises, leveraging favorable policies to maximize corporate value. Such analysis aids investors in making informed decisions and helps creditors understand and evaluate corporate performance. The study focuses on the calculation and comparison of four depreciation methods and analyzes their impact on corporate income tax.