Corporate financial statements, such as income statements, cash flow reports and balance sheets, all employ generally accepted accounting principles, or GAAP, as the basis for their formats.

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 ...

Depreciation reduces asset values, enabling companies to decrease reported earnings and taxes. Several depreciation methods exist, reflecting how assets lose value over time or usage ...

Assets like equipment, vehicles and furniture lose value as they age. Parts wear out and pieces break, eventually requiring repair or replacement. Depreciation helps companies account for the ...

Depreciation spreads the cost of tangible assets over their useful life on income statements. Each year, $1,500 is recorded as a depreciation expense, reducing the asset's book value. Amortization ...

Andrey Popov / Getty Images Depreciation is a type of expense that is used to reduce the carrying value of an asset. It is an estimated expense that is scheduled rather than an explicit expense.