impact of inflation on depreciation

CFA Level II Corporate Finance
#1

Hi,

I was reading in the curriculum that higher than expected inflation reduces the depreciation tax shield. How? And can accelerated depreciation increase the tax shield? or is the accelerated depreciation rate already set and has nothing to do with inflation?

#2

The depreciation amount is fixed in purchase-year dollars. Increased inflation makes fixed amounts worth less in current-year dollars.