What are depreciation expenses?

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Rodriguez 0 Comments

Depreciation expenses are non cash items but what exactly does depreciation means and what are the methods that I can use to calculate it?

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score 0 · Answer 1 · 2012-12-02T18:17:25+00:00

Depreciation is used to limit the economic life of the assets and to recognize the fact that the assets have their productivity reduced as time passes. The economic life of the asset is determined based on the characteristics of the asset and the use that the company makes and then depreciation is charged so that the value of the asset declines as time passes.