{"id":2286,"date":"2013-01-12T03:08:56","date_gmt":"2013-01-12T03:08:56","guid":{"rendered":"http:\/\/officeandhome.biz\/2013\/01\/depreciation\/"},"modified":"2013-01-12T03:08:56","modified_gmt":"2013-01-12T03:08:56","slug":"depreciation-as-an-expense","status":"publish","type":"post","link":"https:\/\/consumertaxservice.com\/tecontax\/2013\/01\/12\/depreciation-as-an-expense\/","title":{"rendered":"Depreciation as an Expense"},"content":{"rendered":"<div align=\"left\">\n<script type=\"text\/javascript\"><!--\ngoogle_ad_client = \"ca-pub-3084109033458149\";\n\/* Office And Home, ATF, Top Left, Created 10\/30\/12 *\/\ngoogle_ad_slot = \"6450059999\";\ngoogle_ad_width = 300;\ngoogle_ad_height = 250;\n\/\/-->\n<\/script><br \/>\n<script type=\"text\/javascript\"\nsrc=\"http:\/\/pagead2.googlesyndication.com\/pagead\/show_ads.js\">\n<\/script>\n<\/div>\n<p style=\"font-family:arial; font-size:14px; text-align:left; color: rgb(0, 0, 0);\">Depreciation is a term we hear about frequently, but don&#8217;t really understand. It&#8217;s an essential component of accounting however. Depreciation is an expense that is recorded at the same time and in the same period as other accounts. Long-term operating assets that are not held for sale in the course of business are called fixed assets.<\/p>\n<p style=\"font-family:arial; font-size:14px; text-align:left; color: rgb(0, 0, 0);\">Fixed assets include buildings, machinery, office equipment, vehicles, computers and other equipment. They can also include items such as shelves and cabinets. Depreciation refers to spreading out the cost of a fixed asset over the years of its useful life to a business, instead of charging the entire cost to expense in the year the asset was purchased.<\/p>\n<p style=\"font-family:arial; font-size:14px; text-align:left; color: rgb(0, 0, 0);\">According to this method of dealing with Depreciation, each year that the equipment or asset is used bears a share of the total cost. As an example, cars and trucks are typically depreciated over five years. The idea is to charge a fraction of the total cost to depreciation expense during each of the five years, rather than just the first year.<\/p>\n<p style=\"font-family:arial; font-size:14px; text-align:left; color: rgb(0, 0, 0);\">Depreciation applies only to fixed assets that you actually buy, not those you rent or lease. Depreciation is a real expense, but not necessarily a cash outlay expense in the year it&#8217;s recorded. The cash outlay does actually occur when the fixed asset is acquired, but is recorded over a period of time.<\/p>\n<p style=\"font-family:arial; font-size:14px; text-align:left; color: rgb(0, 0, 0);\">Depreciation is different from other expenses. It is deducted from sales revenue to determine profit, but the depreciation expense recorded in a reporting period doesn&#8217;t require any true cash outlay during that period. Depreciation expense is that portion of the total cost of a business&#8217;s fixed assets that is allocated to the period to record the cost of using the assets during period. The higher the total cost of a business&#8217;s fixed assets, then the higher its depreciation expense.<\/p>\n<div align=\"center\">\n<iframe loading=\"lazy\" src=\"http:\/\/rcm-na.amazon-adsystem.com\/e\/cm?t=dollacounteco-20&#038;o=1&#038;p=48&#038;l=ur1&#038;category=electronics&#038;f=ifr\" width=\"728\" height=\"90\" scrolling=\"no\" border=\"0\" marginwidth=\"0\" style=\"border:none;\" frameborder=\"0\"><\/iframe>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Depreciation is a term we hear about frequently, but don&#8217;t really understand. It&#8217;s an essential component of accounting however. Depreciation is an expense that is recorded at the same time and in the same period as other accounts. Long-term operating assets that are not held for sale in the course of business are called fixed &hellip; <a href=\"https:\/\/consumertaxservice.com\/tecontax\/2013\/01\/12\/depreciation-as-an-expense\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Depreciation as an Expense&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[65,175,252,163,180,428,171],"tags":[1129,1130,1131,72,1132,1133,1134,87,1135,1136,1137,1138,1139],"class_list":["post-2286","post","type-post","status-publish","format-standard","hentry","category-accountants","category-accounting-2","category-equipment-and-furniture","category-home-business","category-home-office","category-tax-law-offices","category-tools","tag-a-real-expense","tag-cash-outlay-expense","tag-dealing-with-deprciation","tag-depreciation","tag-depreciation-is-an-expense","tag-essential-component-of-accounting","tag-fapplies-only-to-fixed-assets","tag-fixed-assets","tag-ixed-assets-include-buildings","tag-long-term-operating-assets","tag-spreading-out-the-cost","tag-the-equipment-or-asset","tag-useful-life-to-a-business"],"_links":{"self":[{"href":"https:\/\/consumertaxservice.com\/tecontax\/wp-json\/wp\/v2\/posts\/2286","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/consumertaxservice.com\/tecontax\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/consumertaxservice.com\/tecontax\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/consumertaxservice.com\/tecontax\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/consumertaxservice.com\/tecontax\/wp-json\/wp\/v2\/comments?post=2286"}],"version-history":[{"count":0,"href":"https:\/\/consumertaxservice.com\/tecontax\/wp-json\/wp\/v2\/posts\/2286\/revisions"}],"wp:attachment":[{"href":"https:\/\/consumertaxservice.com\/tecontax\/wp-json\/wp\/v2\/media?parent=2286"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/consumertaxservice.com\/tecontax\/wp-json\/wp\/v2\/categories?post=2286"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/consumertaxservice.com\/tecontax\/wp-json\/wp\/v2\/tags?post=2286"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}