Over time, the assets a company owns lose value, which is known as depreciation. As the value of these assets declines over time, the depreciated amount is recorded as an expense on the balance sheet.

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 ...

Typically, companies calculate depreciation for their own purposes using a method called straight-line depreciation. This method takes the acquired cost of the asset and divides its years of useful ...

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...

Over time, the assets a company owns lose value, which is known as depreciation. As the value of these assets declines over time, the depreciated amount is recorded as an expense on the balance sheet.