Depreciation is the process of allocating and claiming a tangible asset's cost each financial year that is spread over its predicted economic life. Small business owners can use depreciation to recoup some of the cost of an asset over its lifespan. There are many different methods for calculating how much of an asset's cost can be written off.
What is accelerated depreciation?
Depreciation ties the cost of using a tangible asset with the benefit gained over its useful life. There are many types of depreciation, including straight-line and various forms of accelerated depreciation. Accumulated depreciation refers to the sum of all depreciation recorded on an asset to a specific date.
What are the different types of depreciation?
There are many types of depreciation, including straight-line and various forms of accelerated depreciation. Accumulated depreciation refers to the sum of all depreciation recorded on an asset to a specific date. The carrying value of an asset on the balance sheet is its historical cost minus all accumulated depreciation.
What is accumulated depreciation?
Accumulated depreciation refers to the sum of all depreciation recorded on an asset to a specific date. The carrying value of an asset on the balance sheet is its historical cost minus all accumulated depreciation. The carrying value of an asset after all depreciation has been taken is referred to as its salvage value.
