Depreciation expense can be a big portion of a company’s total expense. And since expenses decrease income, it affects the overall value of a company. Understanding what it is and the methods can help ...

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 ...

Accounting for depreciation can be a helpful accounting trick when businesses make a major purchase. Depreciation has several different meanings, depending on the context in which it’s being used.

When companies invest in assets, they expect those assets to last a certain number of years. Over time, they’re depreciated based on their remaining serviceable life and any potential saleable value ...

Straight-line depreciation involves reporting the same amount of depreciation expense each year. (If you were to draw the graph of the expense over time, it would form a straight horizontal line, ...

One of the consequences of generally accepted accounting principles is that while cash is used to pay for a long-lived asset, such as a semi-trailer to deliver goods, the expenditure is not listed as ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

Jim Mueller, CFA, began his career as a scientist. He has five years of experience as a senior analyst and another four years as a research analyst. David Kindness is a Certified Public Accountant ...

Straight line method spreads an asset's cost evenly over its life, aiding in clear financial planning. Using this method simplifies financial statements, making a company's health easier to assess.