Depreciation expense can be a big portion of a company’s total expense. And since expenses decrease income, it affects the overall value of a company. Understanding what it is and the methods can help ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

The sinking fund method is one of several advanced methods of depreciation that are more complex than the familiar straight-line and declining-balance methods. The method is seldom used, because it's ...

When a partnership is bought out, a valuation must be conducted to determine the worth of the assets to help arrive at a buyout price. One aspect of determining the value of an asset is factoring its ...

Depreciation is the recovery of the cost of a physical asset, like property or equipment, over multiple years. It allows companies to spread out the cost of some expenses, reduce taxable income and ...

Accumulated depreciation is the sum of an asset’s depreciation expense. It’s calculated from the start of its use to a specific date. It’s also a contra-asset account. That means it decreases the ...

Discover how different depreciation methods affect long-term asset values and short-term earnings, plus key assumptions that influence financial health.

When a business acquires an asset to be used in its operations, the cost of the asset is generally not expensed all at once. Rather, the cost is depreciated over a period of time that depends on the ...

Cost approach values property by summing land value and costs to rebuild, minus depreciation. Key to cost approach: find land value, calculate new construction costs, assess depreciation. Cost ...