Switching from SLN to DDB in Financial Model statements
First, compute depreciation numbers for all years using the double-declining balance method.
Second, construct a combo box to allow you to toggle between the straight-line and double-declining balance numbers. Ensure that according to the depreciation method selected, the appropriate depreciation flows through to all relevant financial statements.
When you switch between depreciation methods for book purposes, the change should have NO effect on cash flows. In your model as currently set up, however, cash flows from operations will change depending on whether you use double-declining or straight-line depreciation. Make the necessary accounting adjustments and reconfigure the model so that CFO stays the same under both options.
Can someone help me understand what to do in this assignment for financial modeling? I have a area in the fixed asset schedule that is called incremental deferred tax liability and I don't know what to put there. Thanks
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