Glossary › Depreciation
Depreciation
Spreading the cost of a long-lived asset over its useful life instead of expensing it all at purchase.
Depreciation allocates the cost of assets like vehicles, equipment, and computers across the years they're used, matching the expense to the periods that benefit.
Tax rules often allow accelerated or instant write-offs for small business assets, so the depreciation in your accounts and the deduction on your tax return may differ — your accountant reconciles the two.
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