Depreciation is an accounting and tax principle that acknowledges the useful life of a physical, long-term asset, which is an asset with a life span exceeding 12 months, and accounts for wear and tear ...

Depreciation is a fairly simple concept. When a business owner buys a fixed asset, that asset loses its value over time, and so its most current value must be accounted for on the company’s balance ...

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 ...

When calculating the capital outlay of a business, you are seeking the balance of cash expenditures - payments made over the span of 12 months or more - or the allocation of funds toward the ...

David Kindness is a Certified Public Accountant (CPA) and an expert in the fields of financial accounting, corporate and individual tax planning and preparation, and investing and retirement planning.