Depreciation meaning: Depreciation

Depreciation : Definition Depreciation is the reduction in the value of a fixed asset due to usage, wear and tear, the passage of time, or obsolescence. The loss on an asset that arises from depreciation is a direct consequence of the services that the asset gives to its owner. Therefore, a reasonable assumption is that the loss in the value of a fixed asset in a period is the worth of the service provided by that asset over that period. From an accounting perspective, depreciation is the ... Depreciation is the term used to describe the slow decline in an asset's value over time, usually brought on by age, wear and tear, or obsolescence. Depreciation is thus the decrease in the value of assets and the method used to reallocate, or "write down" the cost of a tangible asset (such as equipment) over its useful life span. Businesses depreciate long-term assets for both accounting and tax purposes. Definition : Depreciation expense is the cost allocated to a fixed asset during a period. Many people think this is a way to “expense” assets over time, but that’s not really true. It is recorded as an expense on the income statement, but it isn’t an expense of the asset. Instead, it is allocating the cost of the asset over its useful life. What Does Depreciation Mean ?