"Depreciation: A Key Concept in Accounting<br /><br />Depreciation is the systematic allocation of the cost of a tangible asset over its useful life. It represents the decrease in value of an asset due to wear and tear, obsolescence, or other factors.<br /><br />Key Points:<br /><br />- Depreciation is a non-cash expense, as it doesn't involve an actual cash outflow.<br />- It helps businesses match the cost of an asset with the revenue it generates over time.<br />- There are various depreciation methods, including straight-line, declining balance, and units-of-production.<br />- Depreciation is used for tax purposes to reduce taxable income.
