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Why Do Many Companies Use MACRS Modified Accelerated Cost Recovery

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Why do many companies use MACRS Modified Accelerated Cost Recovery System depreciation for tax purposes?
If a company uses MACRS for depreciation for tax purposes, can it use a different method for financial reporting? Explain why or why not.


Definitions:

Subsidiary Company

A company that is completely or majority-owned by another corporation, known as the parent company.

Parent Company

A corporation that owns enough voting stock in another corporation to control its management and operations.

Amortization

The process of gradually writing off the initial cost of an asset over its useful life.

Bond Investment

An investment in debt securities issued by corporations or governments to finance their operations.

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