When your company purchases a fixed asset with an estimated lifetime exceeding one year, you cannot deduct the entire cost in the year of purchase. Rather, you must depreciate the asset by expensing a ...

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

Assets like equipment, vehicles and furniture lose value as they age. Parts wear out and pieces break, eventually requiring repair or replacement. Depreciation helps companies account for the ...

Computers, office chairs and factories all wear down and lose value over time. Depreciation is how accountants factor that fact into their number-crunching. A depreciated five-year-old computer isn't ...

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 ...

When teaching depreciation in Introduction to Accounting, faculty always cover a variety of different depreciation methods, including straight-line depreciation. Next time you teach this topic, build ...

Depreciation expense can be a big portion of a company’s total expense. And since expenses decrease income, it affects the overall value of a company. Understanding what it is and the methods can help ...

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...