How to Calculate Depreciation on Fixed Assets
How to Calculate Depreciation on Fixed Assets
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Depreciation is just the way we spread the cost of a fixed asset over its useful life. Think of it as “paying” for the asset a little each period instead of all at once. *Key points* - *Purpose:* Match expense with the revenue the asset helps generate (matching principle). - *Base:* Cost – Accumulated depreciation (the amount already expensed). - *Methods:* Straight‑line, reducing‑balance, units‑of‑production… most textbooks stick with straight‑line. *Straight‑line formula* [text{Annual Dep'n} =
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