Final answer:
The depreciation method that most closely resembles what is allowable for tax purposes under CRA is the declining balance method.
Step-by-step explanation:
The depreciation method that most closely resembles what is allowable for tax purposes under CRA is the declining balance method. This method allows for higher depreciation expenses in the early years of an asset's life and lower expenses in later years. It is similar to the tax concept of accelerated depreciation, where assets are depreciated more quickly in the early years for tax purposes.
For example, let's say you purchase a computer for your business. Using the declining balance method, you would deduct a larger portion of the computer's cost as depreciation expense in the first few years, and a smaller portion in later years. This mirrors the tax treatment of accelerated depreciation, which allows businesses to deduct larger amounts in the earlier years, reducing their tax liability.