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 ...

Amortization and depreciation are accounting methods used to allocate the cost of assets over their useful lives. Amortization applies to intangible assets like patents and trademarks. Depreciation ...

Depreciation is how the costs of tangible and intangible assets are allocated over time and use. Both public and private companies use depreciation methods according to generally accepted accounting ...

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 ...

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 ...

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 ...

Troy Segal is an editor and writer. She has 20+ years of experience covering personal finance, wealth management, and business news. Toby Walters is a financial writer, investor, and lifelong learner.

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 ...

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Depreciation recapture is the process by which the IRS reclaims tax benefits previously obtained through depreciation when an investor sells a depreciable asset for more than its depreciated value.