Depreciation is an accounting and tax principle that acknowledges the useful life of a physical, long-term asset, which is an asset with a life span exceeding 12 months, and accounts for wear and tear ...

David Kindness is a Certified Public Accountant (CPA) and an expert in the fields of financial accounting, corporate and individual tax planning and preparation, and investing and retirement planning.

When a business buys a long-term asset, it records a portion of the asset's cost as a depreciation expense on the income statement each period to account for wear and tear. With the ...

Accumulated depreciation is the sum of an asset’s depreciation expense. It’s calculated from the start of its use to a specific date. It’s also a contra-asset account. That means it decreases the ...

Over time, the assets a company owns lose value, which is known as depreciation. As the value of these assets declines over time, the depreciated amount is recorded as an expense on the balance sheet.

Discover how different depreciation methods affect long-term asset values and short-term earnings, plus key assumptions that influence financial health.

Depreciation is the recovery of the cost of a physical asset, like property or equipment, over multiple years. It allows companies to spread out the cost of some expenses, reduce taxable income and ...

Depreciation measures how quickly an asset loses value before it breaks down or becomes obsolete. Accumulated depreciation is the total amount of an asset's original cost that has been allocated as a ...

Over time, the assets a company owns lose value, which is known as depreciation. As the value of these assets declines over time, the depreciated amount is recorded as an expense on the balance sheet.