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The asset is referred to as a depreciable asset. In determining the profits net income from an activity, the receipts from the activity must be reduced by appropriate costs.
These may be specified by law or accounting standards, which may vary by country. One such cost is the cost of assets used but not immediately consumed in the activity.
The business then records depreciation expense in its financial reporting as the current janukowycz konferencja online dating allocation of such costs. Any business or income producing activity using tangible assets may incur costs related to those assets.
In accountancy, depreciation refers to two aspects of the same concept: The former affects the balance sheet of a business or entity, and the latter affects the net income that they report. Depreciation is technically a method of allocation, not valuation, even though it determines the value placed on the asset in the balance sheet. Methods of computing depreciation, and the periods over which assets are depreciated, may vary between asset types within the same business and may vary for tax purposes.
There are several standard methods of computing depreciation expense, including fixed percentage, straight line, and declining balance methods. This is usually done in a rational and systematic manner.
This expense is recognized by businesses for financial reporting and tax purposes. Depreciation is any method of allocating such net cost to those periods in which the organization is expected to benefit from use of the asset.
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