Depreciation, What it is?
Depreciation overview. What is depreciation and how is it calculated. Key concepts include; historic cost, residual value, depreciable amount, depreciation rate, depreciation expense, accumulated depreciation and carrying amount.
Depreciation is a method for allocating the cost of an asset over its usable life (allowing for its pattern of use). This is an important phrase because so much of accounting is summarised in here. Key accounting principles - Cost (cost), Period (useful life), Matching (allocating) are highlighted in depreciation.