Straight-line depreciation involves reporting the same amount of depreciation expense each year. (If you were to draw the graph of the expense over time, it would form a straight horizontal line, ...

The goal of accounting is to produce fair and accurate statements about a company's financial performance and condition. An underlying principle of accounting is to connect the expenses that are ...

When companies invest in assets, they expect those assets to last a certain number of years. Over time, they’re depreciated based on their remaining serviceable life and any potential saleable value ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

Learn how the general depreciation system (GDS) works within MACRS, its methods, tax implications, and how it accelerates asset depreciation.

Depreciation expense can be a big portion of a company’s total expense. And since expenses decrease income, it affects the overall value of a company. Understanding what it is and the methods can help ...

When a business acquires an asset to be used in its operations, the cost of the asset is generally not expensed all at once. Rather, the cost is depreciated over a period of time that depends on the ...

Accounting for depreciation can be a helpful accounting trick when businesses make a major purchase. Depreciation has several different meanings, depending on the context in which it’s being used.

Straight line method spreads an asset's cost evenly over its life, aiding in clear financial planning. Using this method simplifies financial statements, making a company's health easier to assess.

Depreciation spreads the cost of tangible assets over their useful life on income statements. Each year, $1,500 is recorded as a depreciation expense, reducing the asset's book value. Amortization and ...