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 ...

In modern industry, where machinery often represents the largest share of capital investment, understanding the real economic ...

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 ...

The straight-line method depreciates an asset on the assumption that the asset will lose the same amount of value for the duration of its service life. The straight-line method requires you to ...

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 ...

Accounting for depreciation can be a helpful accounting trick when businesses make a major purchase. Depreciation has several different meanings, depending on the context in which it’s being used.