What is depreciation?

What is Depreciation

Depreciation is the systematic reduction in recorded (or book) value of property plant and equipment assets.

This reduction in value of the asset occurs because of wear and tear, obsolescence and age.

Accountants use either the straight line, units of use and reducing balance (or diminishing balance) methods so as to calculate depreciation.

Now access our low cost business tutorials to learn more about how depreciation is calculated.