Discover the difference between economic and accounting depreciation and learn how each affects asset valuation and financial decisions.

When a company purchases an asset it does not expect the asset to retain its current value forever. Instead, the company expects the asset to depreciate, or loose some of its value over time.

In accrual basis accounting, when your business purchases a long-lived asset, such as a vehicle, a building or a piece of equipment, you don't immediately write off the full cost as an expense. Rather ...

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. Accounting is the process of keeping track of all financial ...

Vikki Velasquez is a researcher and writer who has managed, coordinated, and directed various community and nonprofit organizations. She has conducted in-depth research on social and economic issues ...