Depreciation is the process of allocating the cost of an asset to expense over its useful life in a rational and systematic manner. valuing an asset at its fair value. increasing the value of an asset over its useful life in a rational and systematic manner. writing down an asset to its real value each accounting period.

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Business

Alejandra Higgins

23 May, 10:56

Depreciation is the process of allocating the cost of an asset to expense over its useful life in a rational and systematic manner. valuing an asset at its fair value. increasing the value of an asset over its useful life in a rational and systematic manner. writing down an asset to its real value each accounting period.

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Johnny Wilkerson · Answer 1

Depreciation is the process to allocating an asset's cost as an expense over its useful life.

Explanation:

An asset's cost price is not expended fully in the year it is purchased as revenue generated from the asset is for many years. A such, asset's cost is allocated through it's useful life. Also, a part of it is expensed in the form of depreciation every year.

It is not a process of valuation, it is a process of cost allocation.

Depreciation can be calculated using straight line method, written down value method, MACRS etc.