10 Facts About Depreciation

Depreciation is thus the decrease in the value of assets and the method used to reallocate, or "write down" the cost of a tangible asset over its useful life span.

Depreciation has been defined as the diminution in the utility or value of an asset and is a non-cash expense.

Depreciation is any method of allocating such net cost to those periods in which the organization is expected to benefit from the use of the asset.

Depreciation is a process of deducting the cost of an asset over its useful life.

Depreciation is technically a method of allocation, not valuation, even though it determines the value placed on the asset in the balance sheet.

Depreciation expense is usually charged against the relevant asset directly.

Depreciation ceases when either the salvage value or the end of the asset's useful life is reached.

Depreciation stops when book value is equal to the scrap value of the asset.

Depreciation first becomes deductible when an asset is placed in service.

Depreciation is then computed for all assets in the pool as a single calculation.