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.

Depreciation is a fairly simple concept. When a business owner buys a fixed asset, that asset loses its value over time, and so its most current value must be accounted for on the company’s balance ...

Typically, companies calculate depreciation for their own purposes using a method called straight-line depreciation. This method takes the acquired cost of the asset and divides its years of useful ...

The goal of accounting is to produce fair and accurate statements about a company's financial performance and condition. An underlying principle of accounting is to connect the expenses that are ...

Depreciation is a concept and a method that recognizes that some business assets become less valuable over time and provides a way to calculate and record the effects of this. Depreciation impacts a ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Khadija Khartit is a strategy, investment, ...

Accelerated depreciation allows businesses to write off the cost of an asset more quickly than the traditional straight-line method. This can provide asset owners with potentially valuable tax ...

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.