In accountancy, depreciation is a term that refers to two aspects of the same concept: first, an actual reduction in the fair value of an asset, such as the decrease in value of factory equipment each year as it is used and wears, and second, the allocation in accounting statements of the original cost of the assets to periods in which the assets are used (depreciation with the matching principle).Depreciation is thus the decrease in the value of assets and the method used to reallocate, or "write down" the cost of a tangible asset (such as equipment) over its useful life span. Businesses depreciate long-term assets for both accounting and tax purposes. The decrease in value of the asset affects the balance sheet of a business or entity, and the method of depreciating the asset, accounting-wise, affects the net income, and thus the income statement that they report. Generally, the cost is allocated as depreciation expense among the periods in which the asset is expected to be used.

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  1. William

    We Buy Any Car valuation

    Last month (February) I was quoted £18,375, this month my valuation is £16380. I've only done 8,000 miles. Soon it will be worth less than the guaranteed buy back value at the end of the term.
  2. J


    We all know that as soon as you drive a new car off the forecourt it generally loses value as it becomes secondhand (or ex demo perhaps). Many EVs are considerably cheaper after a year than they were when new. But v low mile First Edition ORAs as now under £20k on Autotrader with minimal miles...