Found 1 blog entry tagged as Depreciation.

What Is Depreciation and How Does It Work?

Depreciation is an accounting method for allocating the cost of a tangible or physical asset over its usable life or expected life. Depreciation is a term used to describe how much of an asset's worth has been used. Depreciating assets allows businesses to generate revenue while depreciating a percentage of the asset's cost each year it is in use. Depreciation can have a significant impact on a company's profitability if it is not taken into consideration. Long-term investments can also be depreciated for tax and accounting purposes.

important takeaways

  • The cost of using a tangible item is tied to the benefit gained over its useful life through depreciation.
  • Depreciation can take numerous forms,…

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