2. What is the Meaning and Definition of Depreciation

What is the Meaning and Definition of Depreciation?

March 3, 2023Posted inAdvance AccountingNo Comments
Depreciation is the systematic and rational allocation of the cost of an asset over its useful life. It is a method of accounting that is used to account for the decline in value of an asset over time, as a result of wear and tear, obsolescence or other factors. It is an expense that is recorded on the income statement, which reduces the value of an asset on the balance sheet over time.
What is Depreciation

What is Depreciation?

February 24, 2023Posted inAdvance AccountingNo Comments
Depreciation is an accounting method used to allocate the cost of a tangible asset over its useful life. It is a non-cash expense that is used to gradually reduce the value of an asset and allocate the cost to the periods in which the asset is used. This allows businesses to match the expense of an asset with the revenue it generates, and it is an important component in determining a company's net income and tax liability.