What is Depreciation?
Depreciation is the systematic allocation of the cost of tangible assets over their useful life. It reflects the wear and tear, deterioration, or obsolescence of the assets.
Depreciation is the systematic allocation of the cost of tangible assets over their useful life. It reflects the wear and tear, deterioration, or obsolescence of the assets.
Introduction: Depreciation is an accounting method used to allocate the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence. This process allows businesses to spread the initial purchase cost of an asset over the years it contributes to generating revenue, providing a more accurate financial picture. Understanding depreciation is crucial for businesses to manage their assets effectively, ensure accurate tax reporting, and make informed decisions about capital investments, budgeting, and financial forecasting.
Types of Depreciation Methods:
Implications of Depreciation for Businesses: