: It consistently decreases the "book value" (original cost minus accumulated depreciation) of fixed assets over time.
: It aligns the cost of an asset with the revenue it helps generate during specific accounting periods. depreciation
Depreciation is an accounting method that allocates the cost of a tangible asset over its useful life to reflect its decreasing value due to wear, tear, or obsolescence. Core Features of Depreciation : It consistently decreases the "book value" (original
: It is an ongoing reduction that typically continues until the asset's life ends or its value reaches its estimated salvage value. depreciation
: It is an expense that reduces net income on paper but does not involve an actual outflow of cash.