Analysis on the Necessity of Accelerated Depreciation of Fixed Assets Abstract: With the rapid development of science and technology in China, enterprises must accelerate the depreciation and renewal of fixed assets in order to keep up with the development of society. However, at present, most companies in China still use the straight-line method to accrue depreciation, which seriously hinders the pace of updating fixed assets. Therefore, it is necessary to accelerate the depreciation of fixed assets. Keywords: fixed assets; Accelerated depreciation; Necessity; Before the feasible economic system reform, the straight-line method was widely used in the depreciation of fixed assets in China, which seriously affected the production efficiency of the company because of the slow depreciation rate and long renewal period of fixed assets. With the rapid development of science and technology, the intangible loss of fixed assets increases, and the company must update its equipment to keep up with the rapid economic development. In this regard, China's accounting community has conducted extensive discussions. To sum up, there are the following opinions: One opinion holds that China's economic foundation is still relatively weak, and increasing the depreciation rate to accelerate depreciation will inevitably increase costs and reduce profits, resulting in a decrease in fiscal revenue, and advocates gradually increasing the depreciation rate with economic development. Another view is that the current depreciation rate in China is low and the reproduction cycle of fixed assets is too long, which is not conducive to improving the productivity of companies, and advocates imitating developed countries to adopt the rapid depreciation method. Theoretically speaking, accelerated depreciation has two meanings: first, the depreciation of fixed assets is amortized within a short expected service life; Second, fixed assets amortize more depreciation at the initial stage of use and less depreciation at the later stage. Usually accelerated depreciation refers to the latter rather than the former, so some people call accelerated depreciation decreasing depreciation. This depreciation method has two remarkable characteristics: first, the depreciation rate extracted in the first few years is higher than that in the following years, and then decreases every year. This does not affect the total depreciation extracted during the service life of fixed assets, but the depreciation amount extracted in different years is obviously different; Second, the profits and taxes may decrease in previous years, and then gradually increase, which will not affect the total profits and taxes during the depreciation period, but the distribution of profits and taxes is different in different periods. The reasons for implementing accelerated depreciation can be summarized as: 1. Accelerating depreciation is the need of developing market economy, which is a competitive economy. Due to market reasons, the company has to scrap many equipments and machines in advance, which will cause many intangible losses. The only way to reduce or even avoid this intangible loss of the company is to accelerate depreciation. Using accelerated depreciation can not only avoid losses, but also recover funds as soon as possible, so that the company has sufficient funds to buy or develop new equipment, strengthen infrastructure construction and enhance the company's development potential. Accelerating depreciation is not only the objective requirement of market economy, but also promotes the development of market economy. On the one hand, accelerated depreciation makes depreciation expenses enter the cost as soon as possible, which disperses the risk; On the other hand, expenses are converted into assets as soon as possible, which enhances the company's ability to take risks, thus promoting the formation of a market economy risk mechanism. 2. Accelerating depreciation is the need of China's entry into WTO and the world market. At present, most major western market economy countries adopt the accelerated depreciation method of fixed assets. Specific examples are as follows: the United States: straight-line method, declining balance method, sum of years method; UK: Declining balance method is mainly adopted, and the highest depreciation rate of machinery and equipment is 25%; Australia: A high depreciation rate is adopted, and the annual standard depreciation rate of most fixed assets is 20% ~ 33%; Japan: the straight-line method is allowed, and the annual standard depreciation rate of machinery and equipment is10%; Declining balance method is allowed, and the depreciation rate of machinery and equipment is 20.6%, which can be increased by 34% ~ 55% with the approval of the government. As can be seen from the above data, most major western countries adopt accelerated depreciation method. Even in countries that do not adopt this method, the depreciation rate of fixed assets, especially machinery and equipment, is much higher than the current level in China. Because at present, China's depreciation method and rate are in line with international standards, which will inevitably affect the competitiveness of our goods and is not conducive to the world market. Implementing accelerated depreciation is a necessary step for China's economic system to move closer to international practice. 3. Accelerated depreciation better reflects the principle of matching and conservatism in accounting standards, which is conducive to improving China's accounting system. In the initial stage of its use, the production efficiency of fixed assets is high, which can bring more income to the company, so more depreciation should be accrued during this period. With the extension of the use time of fixed assets, its efficiency gradually decreases, resulting in a corresponding decrease in income and corresponding depreciation. This is completely in line with the principle of matching income with its corresponding costs and expenses. The principle of conservatism in accounting, also known as the principle of prudence, requires that the company's accounting should fully estimate the possible losses and risks, and try to reduce them to a minimum when there are many choices. Therefore, the implementation of accelerated depreciation can make the invested funds recover faster and reduce or even eliminate the company's losses.