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 is an expense that reduces net income on paper but does not involve an actual outflow of cash. depreciation
: It is an ongoing reduction that typically continues until the asset's life ends or its value reaches its estimated salvage value. Depreciation is an accounting method that allocates the