Saturday, September 5, 2015

Term of the Day: Depreciation

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September 5, 2015
Depreciation

1. A method of allocating the cost of a tangible asset over its useful life. Businesses depreciate long-term assets for both tax and accounting purposes.

2. A decrease in an asset's value caused by unfavorable market conditions.

Breaking It Down:

1. For accounting purposes, depreciation indicates how much of an asset's value has been used up. For tax purposes, businesses can deduct the...

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Related Definitions

Amortization
Economic Life
Depreciation, Depletion and Amortization - DD&A
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