Final answer:
The IRS permits larger depreciation amounts early on to reflect the quicker loss of value that assets tend to experience initially, which helps businesses by reducing their taxable income and enhancing cash flow.
Step-by-step explanation:
The IRS allows larger depreciation amounts in the early years of an asset's life through accelerated depreciation methods like Modified Accelerated Cost Recovery System (MACRS). This approach recognizes the principle that many assets experience faster value decline in the initial years of use due to factors like higher wear and tear and technological obsolescence. By allowing for greater depreciation amounts upfront, businesses can reduce their taxable income sooner, which in turn provides a cash flow benefit and can serve as an incentive for companies to invest in new assets more frequently.