Over time, the assets a company owns lose value, which is known as depreciation. As the value of these assets declines over time, the depreciated amount is recorded as an expense on the balance sheet.

Depreciation is a concept and a method that recognizes that some business assets become less valuable over time and provides a way to calculate and record the effects of this. Depreciation impacts a ...

When a business buys a long-term asset, it records a portion of the asset's cost as a depreciation expense on the income statement each period to account for wear and tear. With the ...

When your company makes a profit, you can issue a dividend to shareholders or keep the money. The profits you keep are called retained earnings. You can use retained earnings to fund working capital, ...

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 ...

Businesses depreciate long-term assets for both tax and accounting purposes. For tax purposes, businesses can deduct the cost of the tangible assets they purchase as business expenses. Microsoft Excel ...

Residual value is the estimated value of an asset at the end of its useful life. It's used to figure out things like the value of a car at the end of a lease or how much equipment is worth after it's ...

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 ...